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article imageOp-Ed: Trump will target NAFTA protection for Canadian dairy farmers

By Ken Hanly     Apr 18, 2017 in Politics
U.S. President Donald Trump promised, during a visit to Wisconsin a cheese-making state that he will defend U.S. dairy farmers who claim they are being hurt by Canadian protectionist trade policies.
Under the present NAFTA agreement Canada's dairy sector enjoys protection by high tariffs. There are also production controls that ensure the prices for products are sufficient for farmers to make a living. The Canadian dairy system is not a free-market system but involves supply management by the Canadian Dairy Commission(CDC): The Canadian Dairy Commission (French: Commission canadienne du lait) is a Canadian government Crown corporation created in 1966 under the Canadian Dairy Commission Act (1966–1967). According to the Act, CDC is mandated to "provide efficient producers of milk and cream with the opportunity to obtain a fair return for their labour and investment, and to provide consumers of dairy products with a continuous and adequate supply of dairy products of high quality." The CDC also chairs the Canadian Milk Supply Management Committee that coordinates industrial milk supply in Canada. The Minister of Agriculture and Agri-food is responsible for the CDC. The U.S. and some other countries hate the system since global companies want a purely market-based system in keeping with neoliberal policies in the interests of global corporations.
Trump said in Kenosha, Wisconsin: "We’re also going to stand up for our dairy farmers. Because in Canada some very unfair things have happened to our dairy farmers and others.” While Trump did not detail his concerns he said that his administration would call the Canadian government led by PM Justin Trudeau to ask for an explanation. The explanation is that there would be no NAFTA without protections for aspects of the economy that are supply-managed such as dairy products. Negotiators worry about the political fallout from any attempt to do away with the system. The system is described here: In total, there are about 17,000 Canadian farms that operate under Supply Management; this is about 8 percent of all farms in Canada. The dairy industry is the largest of the three supply-managed industries in Canada, with 11,280 farmers operating in 2016 [6]. There are about 2,700 poultry farmers, and fewer than 1,000 egg farmers. Dairy is the largest industry of the supply-managed industries, but it is also Canada's third largest agricultural commodity in terms of farm cash receipts, making it a significant commodity for Canada [7].
Trump again threatened to eliminate the North American Free Trade Agreement (NAFTA) if it cannot be changed in the way he wishes. Trump said: "It's another typical one-sided deal against the United States and it's not going to be happening for long." Trump naturally emphasizes negative effects of NAFTA on U.S. workers but it has had negative effects in Mexico and Canada as well. The appended video from 2006 shows some of those effects. If NAFTA is reopened for negotiation then Mexico and Canada should demand changes — not just the United States.
Some of the demands that Canada should make are listed by the Council of Canadians: "... if the North American Free Trade Agreement (NAFTA) is to be renegotiated, then it must be fundamentally changed, meaning at minimum its investor-state dispute settlement (ISDS), energy proportionality, and water as a good, service and investment provisions must be removed. We also argue that the negotiation process must be done in an accountable and transparent way that includes public consultations." The proportionality provisions prevent the Canadian government from ensuring that there are sufficient supplies of goods to supply Canadians before exports of those goods are allowed. The proportionality provisions apply to oil and gas:
"The deals say that Canada must maintain at least the same level of oil and gas exports to the United States as it had supplied for the past thirty-six months. Only if Canadian consumption is cut proportionately, and then only in times of crisis, could the Canadian government claim jurisdiction over its own energy resources."
So far there has been complete silence as to what changes the Trudeau government is seeking in NAFTA. Neither the U.S. nor Canadian government have suggested that the negotiation process be transparent and accountable, or that there will be any public consultations. Usually trade deals are held behind closed doors with mainly government and corporate representatives taking part.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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