The U.S. dairy lobby is putting increasing pressure on Canada as the talks to redo NAFTA draw closer.
People close to the situation told Reuters that America’s dairy farmers want concessions that Canada doesn’t seem likely to grant. The deal could be a hindrance to the upcoming NAFTA talks, under which Canada sends a lot of its exports to the United States. Dairy farmers have been upset for some time at Canada’s “supply management system,” which is what Canada calls its system of tariffs and quotas designed to keep domestic prices high and limit imports.
A deal last year that allowed Canadian dairy farmers to sell their milk proteins to domestic processors at a discount, drastically slowing American imports. The U.S. Dairy Export Council announced its intentions to pursue challenges with the World Trade Organization. Canada has been in trouble because of its dairy policy in the past.
A WTO panel ruled in 2002 that Canada had breached its trade obligations through illegal subsidies to its dairy industry. The U.S. and Canada would go on to settle the issue in 2003. Ag Secretary Sonny Perdue said earlier this month that all options should be on the table and that dairy is still a concern.