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President Trump attacks Canada’s trade practices
April 19, 2017

Holy cow, he’s now coming after us.

U.S. President Donald Trump slammed Canada’s trade practices for the first time, vowing to call Canadian officials to demand changes to dairy policies Wisconsin farmers say threaten their livelihoods.

“We are also going to stand up for our dairy farmers in Wisconsin. And I’ve been reading about it, I’ve been talking about it for a long time, and that demands, really, immediately, fair trade, with all of our trading partners. And that includes Canada,” he said Tuesday, raising his voice to emphasize the country.

“Because in Canada, some very unfair things have happened to our dairy farmers and others.”

He did not specifically identify what he was talking about in his unscripted musings, which came during a Wisconsin speech in which he touted “Buy American” policies that are opposed by Canada. It appeared, though, that he was weighing in on an arcane but escalating bilateral dispute over ultrafiltered milk, a high-protein concentrate sometimes used to make cheese and yogurt.

The Canadian dairy lobby and government say Canadian policies are not responsible for the crisis that has beset about 75 family farms in Wisconsin since a local milk-processing company cancelled their contracts April 1. But Trump joined the U.S. dairy lobby and a bipartisan group of U.S. lawmakers in attributing the problem to a Canadian reduction in prices that has made American imports less competitive.

His remarks were the latest in a series of signals that suggest Canada will not glide easily through the possible renegotiation of the North American Free Trade Agreement (NAFTA). After declaring in February that the trade relationship is “very outstanding,” his administration has floated a series of complaints.

Not until Tuesday had he called out Canada specifically.

“What’s happened to you is very, very unfair,” he told the farmers. “It’s another typical one-sided deal against the United States, and it’s not going to be happening for long. So . . . we’re going to get together and we’re going to call Canada, and we’re going to say ‘what happened?’ And they might give us an answer, but we’re going to get the solution, not just the answer, OK, because we know what the solution is, all right?”

He did not say what he believes the solution is.

Trump had been urged to take action on the dispute by politicians from both parties, including Republican Wisconsin Gov. Scott Walker and Democratic New York Gov. Andrew Cuomo. In an October letter to Prime Minister Justin Trudeau, Cuomo said the policy amounts to a trade barrier that flouts international agreements.

Trudeau’s government did not respond to Trump on Tuesday. Instead, Ambassador David MacNaughton wrote a letter to Walker and Cuomo, urging them to “not lay blame where it does not belong.”

MacNaughton said Canada “does not accept” the contention that dairy policies in Canada are causing financial hardship in the U.S. “The facts do not bear this out,” he wrote, citing a U.S. government report that says global and U.S. overproduction is the root of the U.S. dairy industry’s struggles.

“As made clear in the report, Canada is not a contributor to the overproduction problem,” MacNaughton said. He argued that Canada’s dairy industry is less protectionist than America’s.

Like most things related to Canada’s milk policy, the dispute is complicated.

At the beginning of April, Wisconsin’s Grassland Dairy Products informed 75 local farms that it would no longer purchase their milk. Grassland said it made the decision because it had just lost tens of millions of dollars worth of Canadian business as a result of the policy change in Canada.

The Canadian dairy industry, tightly regulated under a system of “supply management,” has long been protected from foreign competition by tariffs on imports. But ultrafiltered milk from the U.S. had been allowed to enter Canada tariff-free, and Canadian processors often preferred to import rather than pay higher prices to buy from Canadians.

A year ago, though, Ontario changed the rules: it allowed local processors to buy ultrafiltered milk and other kinds of skim milk from Canadian farms at world prices rather than the higher Canadian prices. All of a sudden, the need for U.S. imports evaporated.

Canada is now adopting a similar policy across the country, further alarming the U.S. industry already beset by a supply glut. In Wisconsin, some of the family farmers say they will have to sell off their cows if they can’t quickly find another processor.

The Canadian dairy industry says the entire issue has been misconstrued by the Americans. A spokesperson for the Dairy Farmers of Canada told the Washington Post in a front-page article Tuesday that the Wisconsin farmers were using inaccurate “alternative facts,” a phrase popularized by a Trump aide.

In the Canadian industry’s version, the real culprit for the U.S. woes isn’t Canadian policy but the U.S. supply glut.

“When too much milk is produced, prices crash and there is no incentive to invest in increased processing capacities. The end result is job loss, loss of income for farmers, and in some cases, farmers having to shut down their farms,” a Dairy Farmers of Canada official wrote in early April.

“No matter how one views the situation, exports to a comparatively small Canadian market — one that is already filled with Canadian milk — are a drop in the bucket that will not solve the problems currently impacting the U.S dairy industry. It is wrong to use Canada as a scapegoat for the situation in the United States.”

The Dairy Farmers declined to respond to Trump on Tuesday, referring questions to the Canadian government. A spokesperson said they are “very confident” Trudeau will “protect our industry.”

Trump has not criticized supply management more broadly. But in a draft letter to Congress that expressed a preliminary NAFTA wish list, his administration hinted that it wants to raise the subject during the upcoming talks.

Trump signed an executive order on Tuesday to crack down on exemptions to Buy American policies, which are supposed to require U.S. government projects to buy from American firms. Canadian Finance Minister Bill Morneau will raise objections to the order at this week’s meeting of G20 finance ministers in Washington, The Canadian Press reported.

 

Source: TheStar.com


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