WASHINGTON, D.C. (RFD NEWS) — Trade tensions with Canada continue to put agricultural markets and producers on alert, with the dairy industry closely watching negotiations between the two countries.
Alan Bjerga with the National Milk Producers Federation (NMPF) joined us on Tuesday’s Market Day Report to discuss why Canada is an important market for U.S. dairy and why the ongoing dispute matters to American milk producers.
says Canada is the second-largest export destination for U.S. dairy products, despite Canada’s tightly controlled dairy system.
Canada Remains a Key Dairy Market
Canada operates under a supply management system that limits access for imported dairy products.
While the U.S. dairy industry recognizes Canada’s right to manage its domestic system, Bjerga says how Canada administers its trade commitments has created problems for American exporters.
“It has been problematic for a long time,” Bjerga said, adding that the current negotiations make the issue particularly important for dairy farmers.
Dairy Trade Dispute Dates Back Years
The disagreement is not new. Bjerga said the dairy industry has raised concerns for years about Canada’s implementation of commitments under the United States-Mexico-Canada Agreement, or USMCA.
Under USMCA, U.S. dairy producers received additional market access through a tariff-rate quota system. However, Bjerga said Canada has allocated those quotas in a way that limits U.S. dairy exporters’ ability to fully take advantage of the access negotiated under the agreement.
“It’s a complex system,” Bjerga said. “But what it basically means is the actions of Canada’s government make this access less than what the spirit and the agreement of USMCA was.”
The issue has been part of U.S.-Canada trade discussions since shortly after USMCA took effect and has now become part of the broader negotiations between the two countries.
Industry Wants Dairy Included in Any Deal
Bjerga said the U.S. dairy industry wants the issue addressed as negotiations move forward.
While he declined to speculate on a timeline, he said the industry hopes to see a revised USMCA agreement that includes dairy.
Despite the current tensions, Bjerga remains optimistic that the two countries can reach an agreement.
“This is a very large bilateral trade relationship between two countries who have been friendly for literally centuries,” he said.
