Trans Pacific Partnership (TPP) trade agreement negotiators meet in Maui starting this Friday in an attempt to reach a final agreement.
TPP is a huge trade agreement, involving 12 Pacific Rim countries that cover roughly 40% of global economic activity. The agreement is critical to U.S. dairy farmers, since it will grant additional access to U.S. markets by New Zealand. In turn, U.S. dairy farmers want access to Canadian and Japanese markets.
While Japan has made some concession, reports Politico, Canada remains a major stumbling block. Its dairy farmers operate under strict dairy quotas and it prevents most U.S. dairy products from being consumed by Canadians.
Though Canada’s dairy industry is small, it does hold some political clout in both Ontario and Quebec. More importantly, Canadian Prime Minister Stephen Harper is facing re-election in October.
According to Politico, Canada may opt out of an agreement signed in Maui, and try to negotiate its way back into the TPP pact after its election. But that would place U.S. dairy farmers in a bind. The National Milk Producers Federation and the U.S. Dairy Export Council both want Canada included in the deal. Without Canada, it will be difficult for U.S. dairy farmers to support the deal.
That, in turn, could cause problems for the Obama Administration in getting the deal passed in Congress. TPP is already facing opposition from Democrats, labor unions and environmentalists. And with a cow in virtually every Congressional district, the Obama Administration will need all the help it can get in passing the TPP.