Wisconsin Governor Scott Walker
Wisconsin Governor Scott Walker sent a letter last month to President-elect Donald Trump, asking him to focus immediate attention on newly implemented Canadian dairy trade policies that will displace U.S. dairy exports and potentially violate Canada’s trade obligations. In the letter, Walker referenced provincial pricing policies already in place, as well as new national policies that are expected to be implemented on February 1.
Also last month, Beth Hughes, IDFA director of international affairs, traveled to Ottawa, Canada, to discuss these trade policy issues with officials from the Canadian government, several embassies and the dairy industry and to insist on fair access for U.S. dairy companies. IDFA plans to raise the issues soon with the Trump Administration’s transition team and appropriate members of the new administration.
In April, the province of Ontario adopted a new ingredients strategy. It allows Canadian cheese manufacturers to buy domestic ingredients at world market prices, as opposed to the usually higher price controlled by Canada’s national supply management system. This strategy has had a negative impact on U.S. companies selling ultra-filtered milk to Canadian processors, who have imported the products duty-free under the North American Free Trade Agreement for years to make cheese.
“We believe the policy was designed to discourage U.S. exports of ultra-filtered milk and incentivizes Canadians to purchase Canadian milk, which is a possible violation of World Trade obligations,” Walker said in his letter.
The Dairy Farmers of Canada and the Dairy Processors Association of Canada have agreed to adopt similar national protectionist policies as an ingredients strategy. This “Agreement in Principle” requires final ratification before its scheduled implementation date, Feb. 1.
Canada is the top international trading partner with Wisconsin, which exported $358 million worth of dairy products to Canada over the last five years, according to Walker.
"We have valid issues with the current and future dairy polices in Canada and their impact on our members," said Hughes. "Unfortunately, the Canadians have been brushing off our concerns and continuing to violate their trade obligations. Until they start playing by the rules, we'll keep pounding at their door.”
Fair access to the Canadian market is important for members, and IDFA will insist on fair treatment, Hughes said, adding that working aggressively on these issues will be a trade priority for IDFA going forward.
Learn more about Hughes’ visit to Canada.
For more information, members may contact Hughes at email@example.com.