Dairy Makes NAFTA Negotiations More Challenging

February 5, 2018 04:45 PM
 
Bloomberg_Milk

The impact the North American Free Trade Agreement (NAFTA) has had on U.S. dairy sales is well documented. NAFTA is credited, in large part, for the growth of U.S. dairy exports from 4% in 1996 to 14% in 2017. If dairy has benefited from NAFTA so much, why is it one of the biggest hurdles in the negotiations? The answer is simple: Canadian supply management.

“Unlike in the U.S., where the price of milk is subject to the free market, in Canada the price is negotiated beforehand. The government sets the rules of the negotiation, and then farmers and processors determine the price. Not only that, a quota system set up in 1971, known as supply management, controls the amount of milk each farmer may produce,” says Christopher Booker, a reporter for PBS.

As part of the NAFTA renegotiations, the U.S. is demanding that Canada leave its supply management system. Canadian dairy farmer Peter Strebel says the end of Canadian supply management is not a fair request.

In 10 years, they’re giving us absolutely nothing in exchange,” he told Booker. “I mean, if that’s supposed to be a win-win partnership, I don’t get it. I don’t know.”

Canada's Minister of Foreign Affairs, Chrystia Freeland, says Canada is hoping for a win-win solution, but they will protect their nationalist interest.

Listen to Booker’s full story here.

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