Dairy trade updates and concerns in North America
US and Mexico recently affirmed good dairy trade relations, while Canada continues to be at odds in dairy product trade relations with the US, the UK and several other countries.
Recently, dairy industry members from the US and Mexico met in Chihuahua, Mexico, to renew their commitment to collaborate and advocate on mutually-beneficial dairy policies. These meetings have occurred every year or two since 2016.
The National Milk Producers Federation and US Dairy Export Council led the US delegation, which consisted of more than 14 companies. Mexican organisations included the Mexican Association of Milk Producers and the National Chamber of Milk Industries.
Canadian dairy trade outlook
Al Mussell, research director at the Canadian Agri-Food Policy Institute, recently warned that the coming US election and possible upcoming changes in Canadian federal government leadership, trade dynamics and policy uncertainty will continue to be the biggest factors affecting Canada’s dairy industry. He commented at the Progressive Dairy Operators Symposium.
Mussel sees American trade policy as protectionist, and notes that understanding this stance is key to safeguarding the Canadian dairy sector. However, several countries including the US, New Zealand and Britain are disgruntled with what they have called unfair protectionist measures in the Canadian dairy market.
Access to the Canadian market
In early May, New Zealand trade minister Todd McClay said in a news release that “Canada’s refusal to comply in full with a CPTPP trade dispute ruling in our favour over dairy trade is cynical and New Zealand has no intention of backing down.” McClay has asked “for urgent legal advice in respect of our ‘next move’ and says the Canadian government still has time to honour its obligations to New Zealand both in the spirit and substance of the agreement.”
This followed 4 claims against Canada made by New Zealand’s government last year related to market access under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Similarly, US dairy organisations and government officials have expressed disappointment with a ruling related to Canada’s dairy trade quotas, which, according to them, do not align with the USMCA (a trade agreement between the US, Mexico and Canada).
In January, UK negotiators halted 2 years’ worth of trade negotiation with Canada concerning dairy products and other goods. No progress has been made since.
Shockingly, a piece of legislation known as Bill C-282 inches closer to becoming law in Canada. It appears to tie negotiators’ hands quite tightly. One law firm notes that if adopted, “this legislation would restrict Canada’s trade negotiators from conceding further market access for products in the dairy, poultry and egg supply-managed industries in future free trade negotiations.”
In April, C-282 passed second reading in the Senate of Canada, with one reading to go before it becomes law.
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