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Trump wins support for possible WTO action on Canada dairy

21 April 2017

Monica and Dave Roskopf say they are thankful but not more optimistic about their future as dairy farmers after President Donald Trump took their side in a dispute with Canada this week.

Ambassador David MacNaughton said in a letter Tuesday night to the governors of Wisconsin and NY that Canada is aware of their letter to Trump asking him to address Canada's dairy practices. "The facts do not bear this out", the letter began. "Nearly one year ago, we, along with other state and USA dairy officials, warned our federal partners - and Canadian industry and government representatives at all levels - that protectionist regulations would harm USA dairy producers".

The U.S. president's tough talk on trade was coupled with the signing of a "Buy American-Hire American" executive order created to bolster protectionist U.S. procurement policies and limit the number of foreign workers coming into the country.

After what has been a relatively warm beginning in relations with Canada, which included what was seen by many as a positive trip to Washington by Prime Minister Justin Trudeau, Trump dropped the gloves on Canada's well-guarded dairy sector.

Trump was amplifying the complaints of Wisconsin and NY governors, who say Canada's decision to create a new lower-priced, classification of milk product has frozen USA producers out of the Canadian market.

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Schumer, D-N.Y., an opponent of the 1994 North American Free Trade Act, has suggested that Canada violated NAFTA in its policies to raise tariffs on some American milk products.

But Damsteegt said putting the blame on the dairy industry isn't right.

About 70 dairy producers in both Wisconsin and NY are affected by the decision. More than 75% of Canada's exports go to the USA, and only 18% is imported from U.S.

Canada's dairy sector is protected by high tariffs on imported products and controls on domestic production as a means of supporting prices that farmers receive.

The President called Canada's system "unfair" during a stop in Kenosha, Wisconsin, where he also signed his Buy American and Hire American executive order. Canada changed its policy on pricing its domestic milk to cover more dairy ingredients, leading to lower prices for Canadian products including ultra-filtered milk that compete with the US product.

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Trudeau said he wants to have a fact-based conversation with the Americans, noting the US - like other countries - subsidizes its dairy and agriculture industries to the tune of hundreds of millions, if not billions, of dollars.

Indeed, Canada's softwood industry makes no secret of its own search for opportunities in China.

Trudeau said he was not going to "over react" and that he planned to move the trade conversation forward "in a way that both protects our consumers and our agricultural producers".

Trump spoke out against Canada on Tuesday in a way he's not done before, saying Canada has been "very, very unfair" to dairy farmers and "we're going to start working on that". So we're going to have to get to the negotiating table with Canada very, very quickly.

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