Round 3 of NAFTA talks eye dairy sector

OTTAWA — The first punches in what promises to be a bitter fight over Canada’s protected dairy industry are expected to be thrown during this week’s third round of North American Free Trade talks in Ottawa.

The U.S. dairy lobby says it wants the elimination of Canada’s supply management system — which slaps imports with a 270 per cent duty — and it says it has the support of its government as NAFTA talks begin in earnest.

The Canadian industry isn’t backing down and accuses the U.S. of giving its farmers unfair subsidies, while politicians from Prime Minister Justin Trudeau on down have sworn to protect the much-maligned system that strictly controls the amount of foreign dairy products flowing into the country.

Jaime Castaneda, senior vice-president with the National Milk Producers Federation, said American dairy producers had tolerated the existence of supply management, but Canada went too far when it a created a new class of milk.

Now, Castaneda said, the U.S. industry has formed an alliance with Mexico and their goal is nothing short of the full-scale destruction of supply management to solve their problem with that.

Castaneda said he realized this is “very political in Canada,” but the time has come to end a system where you “have a cartel imposing higher prices for consumers in Canada,” and that has faced widespread international criticism.

Yves Leduc, director of international policy for the Dairy Farmers of Canada, said American legislation guarantees billions of dollars in subsidies and support to the U.S. agriculture industry. “It’s double standards here,” he said.