Trade talks between the U.S. and Canada are down to the wire. The Trump Administration set the final day of August as a deadline for our northern neighbor to sign on to a tentative agreement with Mexico and the U.S. Idaho dairy farmers are paying attention.
The CEO of the Idaho Dairymen’s Association, Rick Naerebout, says the dairy industry as a whole is watching the negotiations in Washington, D.C. with bated breath. Those in the sector are hoping to see a deal with Canada come along addressing two main issues.
Naerebout says one revolves around the very concept of free trade with Canada.
“We don’t have access to the Canadian market for our U.S. dairy products, so it flies in the face of calling it a free trade agreement,” says the CEO.
The second issue is more technical and relates to Canada’s strict quota system that keeps its dairy supply tight. Naerebout says it arose when Canada raised its quota for cream and butter.
“So what Canada has been doing the last few years is they are encouraging the increase in production domestically – using the cream that they need – but then making skim milk powders and nonfat milk powders that they are dumping onto the world market at below market prices,” says Naerebout.
Earlier this week the U.S. and Mexico established a conceptual framework for a bilateral trade agreement. Naerebout says he applauds the Trump Administration forging a deal, but he says true free market access isn’t in place yet.
The U.S. still has tariffs on Mexican aluminum and steel products, and Mexico continues to put tariffs on American dairy items.
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