The United States ? Mexico ? Canada Agreement (USMCA) goes into effect on July 1st. It is a broad-reaching agreement, of which agriculture is only a part. However, agriculture was a large enough part that special considerations were made in the pact. This is especially true when we look at the access, or lack of access, that U.S. dairy had to Canadian markets. While we the thought of a door finally opening, it looks as though it is opening to a room with another locked door.
Former Obama-era Agriculture Secretary and Iowa Governor Tom Vilsack is now the President and CEO of the U.S. Dairy Export Council. He talks about Canada?s implementation of tariff-rate-quotas (TRQs), and what that will mean for our dairy industry?s chances of gaining access to Canada.
Vilsack explains how these TRQs work, and how Canada is going to use these to their advantage.
The USDEC has joined with the National Milk Producers Federation (NMPF) to call on the U.S. government to insist Canada acts in good faith by the terms of the USMCA agreement. Vilsack talks about a mechanism in the trade pact that we didn?t have under the original North American Free Trade Agreement (NAFTA). Vilsack says this mechanism allows the member countries to raise issues in how the trade deal is being followed. That is what the USDEC and NMPF are asking our government to do.
Vilsack says while they had been hopeful that Canada?s actions would change under USMCA, they were wary. Vilsack said he had already feared Canada may try this tactic way back in January.
Vilsack says that the actions that Canada has taken doesn?t give the industry much confidence that Canada will live up to its word to do away with Class-7 protectionist pricing and their dumping of milk powder on the global marketplace.
Starting off USMCA on a bad note only days before the trade pact takes effect, should be concerning. However, this is a broad trade deal, and the possibility of putting some of the provisions immediately to the test may be a good litmus test on how well it will hold up over time.
