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Food and Farm-Milk Dispute story

21 April 2017

Canadian dairy producers recently chose to collectively lower their prices in order to compete with cheaper, American imports.

In his letter to the governors of Wisconsin and New York, MacNaughton argues that Canada is not responsible for the dairy industry's southward borders, based on a report by the US Department of Agriculture (United States Department of Agriculture).

Several U.S. dairy trade groups and legislators at the state and national levels have been pushing for the Trump Administration to take action against Canada for what they deem as protectionist policies.

On Tuesday, Trump suggested he, along with Wisconsin Gov. Scott Walker, Sen.

Trump promised on a trip to Wisconsin on Tuesday to "stand up for our dairy farmers because in Canada some very unfair things have happened".

Mr MacNaughton instead laid the blame at the feet of "US and global overproduction" and the hard "global situation" of low world dairy prices, which is a problem faced by farmers on both sides of the border.

When customers in Canada, who have been purchasing milk products from American suppliers for years, suddenly decide to switch to domestic suppliers after Canada implements a major change in milk pricing, it is abundantly clear that the lost business incurred by US farmers is directly tied to Canada's milk pricing system. It dramatically cut the prices on ultra-filtered milk in Canada.

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But, she said she feels that Ottawa has a "strong Team Canada approach" to the situation and "that is serving us well". Nevertheless, Canada deployed cabinet ministers, premiers and various trade officials to the explain how beneficial NAFTA is for all countries involved-Canada, the USA and Mexico.

On dairy, Freeland said, Canada buys five times more than it sells to the US; on lumber, Canadian producers have always prevailed in past court cases, and a protracted dispute would only drive up USA housing costs.

Canada's envoy to Washington on Tuesday sent a letter to the governors of NY and Wisconsin - both major dairy states - saying USA producers' problems stemmed from overproduction rather than Canadian policy. "Canada buys more from the US than any other country - including the EU, Mexico, China and Japan", wrote Alex Lawrence in an emailed statement.

The U.S. now enjoys a $400-million dairy surplus with Canada, "so it's not Canada that is a challenge here", he said Thursday in a question-and-answer session with Bloomberg television.

"The United States needs Canadian lumber".

The debating the idea of a border tax that could hurt certain imported products - including Canadian oil, which is a leading source of America's energy supply.

But Canadian agriculture leaders say they have a right to enact domestic-minded policies, especially as USA farmers flood global markets with excess milk.

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American officials have stopped short of identifying what type of retribution a continuation of milk product exclusion would produce. But that leaves farmers with excess protein, which is where ultra-filtered milk comes in. In his own letter to Walker and Cuomo, Ambassador David MacNaughton said the facts do not support a charge that the Canadian dairy industry is to blame for the woes of some American farmers. Russian Federation is buying less milk from the Europe because of sanctions, and China is buying less milk, which affects everybody. Canadian processors and producers are adjusting the relative price of ingredients to maintain a domestic market for those ingredients.

This is the same president who recently played down irritants with Canada; he said he just wanted to do a little trade tweaking.

"To me, fundamentally, that's the market working".

"I think this is probably the biggest trade negotiations test it (supply management) has yet faced". "He is defending his domestic dairy industry", chief executive Jacques Lefebvre said in an emailed statement.

That prompted Canadian farmers from a variety of provinces to lobby for the creation of a new classification of milk product that could be priced competitively with American imports.

"Diafiltered milk is not being used in the United States", he says.

In Canada, through supply management, quotas for milk are set for producers and demand is met with little surplus.

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Canada Wood, an industry trade group, said earlier this month it would "take the first steps to extend its reach to Wuhan, which is the economic engine of central China", by establishing a joint Sino-Canadian Modern Wood Construction Technology Center in the little-known Chinese city of more than 10 million.