‘Time we’re spending on Canada is extraordinary’

U.S. finds dairy most complex in NAFTA talks

One of President Donald Trump’s top trade negotiators says NAFTA talks with Canada have been exceptionally arduous, calling haggling over the Canadian dairy market the toughest issue of his career.

Offering a rare glimpse inside the high-pressure trade discussions, chief agricultural negotiator Gregg Doud said both sides have been working “very, very hard,” with dairy the headline dispute.

“The amount of time we’re spending on Canada right now is extraordinary,” Doud told a gathering of the U.S. National Farmers Union.

“We have one issue that’s probably the most difficult that I’ve ever seen in my career that we’re trying to deal with.”

At a separate appearance before a U.S. Senate committee, Doud said the challenge is the “disparate” nature of the two dairy sectors, involving Canada’s “closed” supplymanagement regime, and America’s open system.

His comments came to light as Foreign Affairs Minister Chrystia Freeland met Friday with Canadian milk producers, who are concerned the trade deal will give U.S. farmers more access to their customers.

Lucie Boileau, a spokeswoman for the Dairy Farmers of Canada, said she had no comment on the session between her group’s leaders and Freeland.

The Americans want to be able to sell more milk products to Canada, whose supply-management system sets dairy prices and assigns a limited duty-free quota to the U.S. The States exported just under $500 million of dairy goods north of the border last year, about three times what it imports from here.

Canadian milk producers say supply management assures them a stable price, avoiding the kind of government subsidies that are common in the struggling, oversupplied American industry.

Aside from dairy, dealing with barriers to the Canadian grain market and wine retailing are the most important agriculture issues for the U.S., Doud said.

Canada re-entered the NAFTA talks last month after five weeks of two-way negotiations that resulted in a sweeping new trade deal between the U.S. and Mexico.

Mexican politics and the requirements of U.S. law have created pressure to bring Canada into the agreement before the end of this month.

Freeland met with U.S. Trade Representative (USTR) Robert Lighthizer on Tuesday, but has not been back to Washington since.

It’s unclear when their meetings will resume, although both sides’ officials have been talking between the ministerial-level talks.

Trump has repeatedly highlighted agriculture as the key point of contention, accusing Canada of broadly mistreating American farmers, though most of them, and his own agriculture department, call NAFTA a huge success story.

Doud, who is part of Lighthizer’s office, said dairy is “the” top priority among agricultural issues.

And despite the appearance that negotiations are stalemated, he suggested both sides are committed to resolving them.

“We have spent an enormous amount of time working on this (dairy) issue. Good faith. Both countries are trying to resolve this issue,” he told the Senate agriculture committee Thursday.

“The challenge is how disparate these two systems are between Canada and the U.S.: their closed, supplymanagement system versus our open system.”

He said the wine trade, and Canada’s policy of automatically classifying U.S. grain exports as lower-priced feed grain, were the next biggest agricultural issue.

The USTR has complained about policies that give B.C. wines preferential treatment in the province’s grocery stores.

And Doud said he and colleagues are looking closely at allegations, reported by the National Post this week, that Canadians are dumping fresh potatoes into the States, while impeding American imports.

“That is definitely a priority,” he told the committee.

“We’re having some conversations and addressing that as we speak.” Booms, busts, winners and losers: Follow the oilpatch with Geoffrey Morgan, financial post. com