U.S. dairy calls for end to Canadian supply management

U.S. dairy producers are taking a hard line ahead of the fourth round of the NAFTA talks this week by urging the Trump administration to push for elimination of Canada’s supply management system. “I don’t know what the U.S. government is going to do, but we certainly are talking very clearly that we need complete elimination of [Canadian] tariffs,” said Jaime Castaneda, senior vice president for strategic initiatives and trade policy at the National Milk Producers Federation. “Once you eliminate tariffs, supply management goes.” That’s a big demand, since Canadian officials from Prime Minister Justin Trudeau on down have vowed to vigorously defend the supply management system.  The U.S. has already eliminated most agricultural tariffs through the NAFTA framework, except for dairy and sugar, so there is relatively little more Canadian and Mexican farmers can get from a new deal. But since both Mexico and Canada have long wanted FDA recognition to sell Grade A dairy products like fresh yogurt and fresh cheeses in the U.S., there could be pressure to allowthose products in, Vetter said.The U.S. and Mexico recently struck a sugar deal that takes care of the most immediate concerns on that front, but Canada continues to want to be able to export more refined sugar to the U.S., Vetter added. In addition, since Canada’s refineries have excess capacity, they'd like to be able to import raw sugar from other countries around the world, refine it, and have it count as Canadian when exported to the U.S. so it can enter duty-free, she added.