Sen. Chuck Schumer, D-N.Y., this week stressed to U.S. Trade Representative Robert Lighthizer that a modernized North American Free Trade Agreement (NAFTA) must include provisions to allow U.S. dairy to compete with Canada on a level playing field. In a letter to the ambassador, Schumer said NAFTA should dismantle Canada’s restrictive dairy pricing policies, known as Class 7, and called the issue a “top priority.”

IDFA has worked with the senator’s staff on this issue.

“As I have expressed to you many times, I strongly believe that we should not miss this opportunity to protect our dairy producers from Canada’s recent predatory trade practices,” Schumer said in the letter. “As you know, Canada’s Class 7 pricing program, a market-distorting supply management system, has caused severe pain to New York dairy producers since it came into force last year.”

Canada’s Class 7 blocks U.S. exports of ultra-filtered milk and allows the country to dump skim milk ingredients on the world market. A report released by the U.S. Department of Agriculture this month quantifies the negative effect of this policy, showing that the value of Canadian imports of ultra-filtered milk fell 65 percent last year, dropping from $72 million to $25 million. It also reported that the value of Canada’s imports of U.S. ultra-filtered milk fell 85 percent in January 2018 compared to January 2017, which represents a decline of more than $5 million.

“This Class 7 system is likely a violation of Canada’s World Trade Organization (WTO) commitments, but addressing it quickly through NAFTA renegotiation is needed, rather than waiting for years for a WTO determination,” Schumer said. [MH1] 

Read the letter here.

Senators Appeal to Canadian Officials

Also this week, four U.S. senators wrote to Chrystia Freeland, Canada’s minister of foreign affairs, and David Naughton, ambassador, Embassy of Canada, to outline the symbiotic trade relationship between the two countries and urge them to carry the same spirit of strong free trade to the NAFTA negotiations.

“No product or sector facing protectionist barriers should be off limits during these negotiations, and dairy is no exception,” the senators said. “We urge you and your colleagues to work with Ambassador Lighthizer to craft a new NAFTA that allows all farmers and manufacturers to compete without government intervention or prohibitive tariffs.”

The senators are Pat Toomey, R-Pa., Ron Johnson, R-Wis., Michael Lee, R-Utah, and Cory Gardner, R-Colo.

Read the letter here.

For more information, contact Beth Hughes, IDFA director of international affairs, at bhughes@idfa.org.