Canada dairy farmers unhappy after meeting with Justin Trudeau on trade deal

Friday, 05 Oct, 2018

The new trade agreement between the U.S., Canada and Mexico includes a provision that requires one member to notify the others if it launches trade talks with a non-market economy.

That's wrong, simply by virtue of the number of trade partners involved.

The agreement represents the fulfillment of a signature campaign promise and the brokering of an agreement that just days ago seemed likely to unravel, threatening the decades-old North American free trade framework. The plan to compensate the supply-managed farmers stalled when the United States withdrew from the TPP in 2017.

According to USA legal definitions, a non-market economy is one that "does not operate on market principles of cost or pricing structures, so that sales of merchandise in such country do not reflect the fair value of the merchandise".

Under the agreement, Canada would drop its Class 7 pricing system, in which that country prices milk ingredients such as powdered and skim milk at a lower cost than butter. The Federal Reserve Bank of Boston found the following year that the WTO's initial membership accounted for more than 90 per cent of global economic output.

Dairy farmers on the Island and throughout the province have banded together in the past decade to spend money on advertising and have seen their market grow, she said.

THE FACTS: That's true. "Our companies won't be leaving the United States, firing their workers and building their cars elsewhere".

The new agreement, subject to ratification, is called the United States, Mexico and Canada Agreement, otherwise referred to as the USMCA.

The pact, if approved by Congress, will raise the percentage of a car's content that must be built within the trade bloc to 75 per cent from 62.5 per cent if it is to qualify for duty-free status.

Mexico is exempt as long as its manufacturing growth doesn't exceed US production, while Canada's applies to far more cars than the country produces.

Donald Trump announced on October 1 his congratulations to Mexico and Canada for working out a trade deal with America. "You know when it ended?"

Were I Sarah Sanders, I would be sending the whiny Dairy Farmers of Canada statement to every media contact in my list.

"We are sending China a message, and I hope they are listening". "Long term, we'll be producing less milk because those dairy products will be filled by American products". Beijing responded by announcing tariffs of 5 percent to 10 percent on an additional $60 billion worth of US imports.

However, the new agreement mandates that the deal be reviewed in six years.

The trade-off was increased access to the Canadian market for American dairy producers. That is meant to force automakers to source fewer parts for an "Assembled in Mexico" (or Canada) auto from Germany, Japan, South Korea or China.

The deal could prompt automakers to build more cars in low-wage countries, but tariffs now imposed on cars built in China would make that a tough proposition.

"This deal makes our partnership even stronger and benefits people across North America", Trudeau tweeted. The United States ranks No. 2 in the world behind China in manufacturing output.

"The concessions were all from Canada and Mexico", MacKay said. "But I don't think it's going to make a material difference in our activities", Morneau told a business audience.

Two other recent trade deals with Europe and Pacific nations also made similar concessions. The Trump administration set a September 30 deadline for Canada to join the agreement, or tariffs would be placed on vehicles exported to the U.S.

A Canadian official told The Associated Press that the agreement preserves a NAFTA dispute-resolution process that the USA wanted to jettison. The U.S. wanted a higher figure.