The Telegram (St. John's)

Trump advisers press for dairy concession­s

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Canada’s protected supply-managed dairy industry emerged as a major 11th-hour irritant as the Trudeau government returned Tuesday to what could be the final, pivotal round of talks to salvage the North American Free Trade Agreement.

Two of Donald Trump’s top lieutenant­s turned up the heat on Canada to open up the protected sector that the U.S. president has repeatedly attacked. But Prime Minister Justin Trudeau remained unmoved.

The pressure came one day after the U.S. president again blasted the Canadian dairy industry during his announceme­nt of a trade agreement with Mexico that he said could replace NAFTA.

Dairy is a politicall­y charged issue that many analysts have predicted would be among the final conflicts to be addressed in the NAFTA renegotiat­ion. In Canada, it is a near-$20-billion industry that employs more than 220,000 people. Supply management is considered sacrosanct in Quebec and Ontario — Canada’s two largest provinces, which mark the path to power for all political parties.

Trump imposed a Friday deadline for Canada to join the U.S, and Mexico, which is when the administra­tion plans to give Congress its mandatory 90-day notificati­on of the new trade deal.

Commerce Secretary Wilbur Ross and Larry Kudlow, the director of the president’s National Economic Council, said in separate television appearance­s on Tuesday that concession­s from Canada on dairy are essential to getting a three-way deal by then.

“They may have some problems with the kinds of concession­s we need,’’ Ross told the Fox Business News program Mornings With Maria.

“They’ve been very bad to our farmers, particular­ly to our dairy farmers. The president has made clear that’s not something that’s agreeable to him.’’

Kudlow told the Fox show Varney and Co. that Trump would “love’’ to make a deal with Canada. But he said it has to be “a good deal which is in the interests of the American economy, the American workforce, American farmers.’’

The Trudeau government has repeatedly pledged to protect dairy farmers, but Canada has opened up limited access to its dairy market in previous trade talks, including its comprehens­ive pact with the European Union.

The prime minister sidesteppe­d a question Tuesday about whether he would be willing allow more access to the Canadian market.

“My position on defending supply management has not changed. We will defend supply management.’’

It’s not clear that the United States actually wants to destroy supply management. Much of the American ire is focused on Canada’s decision to introduce a new classifica­tion of dairy product.

In 2016, Canada created the Class 7 pricing agreement that has essentiall­y restricted U.S. exports of ultra-filtered milk used to make dairy products. It allows Canadian dairy processors to buy domestic milk at cheaper world market prices than the higher prices under supply management. U.S. farmers say that’s a violation of Canada’s trade commitment­s.

The head of Saputo Inc., Canada’s largest dairy processor, told The Canadian Press in June that the NAFTA dairy impasse with Trump can be resolved if Canada ends Class 7.

Dairy Farmers of Canada has said that ending Class 7 is out of the question.

On Tuesday, the organizati­on released a statement reiteratin­g the need for Ottawa to protect supply management. It made no mention of Class 7. Officials from the dairy lobby were unavailabl­e for interviews.

On Monday, as Trump piled on his with his long-standing criticism of Canadian dairy, he did not single out supply management specifical­ly. “You know, they have tariffs of almost 300 per cent on some of our dairy products, so we can’t have that. We’re not going to stand for that,’’ he said.

Trump then dangled the possibilit­y of imposing harsh auto tariffs to punish Canada. The Commerce Department is currently investigat­ing whether to impose tariffs of 25 per cent on Canadian autos under national security provisions in U.S. trade law.

 ?? CP PHOTO ?? Dairy cows rest at a farm in Eastern Ontario. Two of Donald Trump’s top lieutenant­s are turning up the heat on the Trudeau government to open up its protected supply-managed dairy industry as Canada returns to the NAFTA bargaining table.
CP PHOTO Dairy cows rest at a farm in Eastern Ontario. Two of Donald Trump’s top lieutenant­s are turning up the heat on the Trudeau government to open up its protected supply-managed dairy industry as Canada returns to the NAFTA bargaining table.

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