‘The amount of time we’re spend­ing on Canada right now is ex­tra­or­di­nary’

Top U.S. ne­go­tia­tor for NAFTA calls dairy ‘most dif­fi­cult is­sue’ of his ca­reer

Saskatoon StarPhoenix - - FINANCIAL POST - TOM BLACK­WELL

One of U.S. 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” sup­ply-man­age­ment 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.

COLE BURSTON/GETTY IM­AGES FILES

The U.S. chief agri­cul­tural ne­go­tia­tor Gregg Doud says the big chal­lenge with the dairy is­sue is the “dis­parate” na­ture be­tween Canada’s “closed” sup­ply-man­age­ment sys­tem ver­sus the open sys­tem in the U.S. The Amer­i­cans are push­ing for more mar­ket ac­cess.

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