Cana­di­ans, raise a glass of milk to Don­ald Trump

The U.S. pres­i­dent has helped Cana­dian con­sumers by forc­ing Canada to con­cede a por­tion of its dairy mar­ket

Waterloo Region Record - - Insight - PA­TRICK LU­CIANI AND OWEN LIPPERT Pa­trick Lu­ciani is se­nior fel­low at the At­lantic In­sti­tute for Mar­ket Stud­ies. Owen Lippert is a pub­lic pol­icy ad­viser in Toronto. © Troy Me­dia

If U.S. Pres­i­dent Don­ald Trump is look­ing for friends, he won’t find them in Canada, es­pe­cially af­ter dress­ing down Prime Min­is­ter Justin Trudeau for be­ing “very dis­hon­est” at the G7 meet­ing in Que­bec ear­lier this year. That in­sult won’t be soon for­got­ten.

But un­in­ten­tion­ally, Trump was the only one on the side of or­di­nary Cana­di­ans when rene­go­ti­at­ing the North Amer­i­can Free Trade Agree­ment (NAFTA) re­gard­ing dairy prod­ucts.

The new United States-Mex­ico-Canada Agree­ment (USMCA) low­ered the dairy food bills for Cana­dian fam­i­lies — de­spite the op­po­si­tion of ev­ery Cana­dian mem­ber of Par­lia­ment, save Maxime Bernier.

Even the provinces sup­ported con­tin­ued pro­tec­tion for the dairy in­dus­try and its wealthy pro­duc­ers against lower prices for con­sumers.

Trump likely won’t re­ceive many thanks from mothers in Toronto or Mon­treal. Fair enough. But Cana­dian con­sumers who pay from a third to 50 per cent more for their cheese and milk than those in other coun­tries will now see some re­lief. It’s not un­usual for Cana­di­ans to pay $10 US for about 10 ounces of ched­dar cheese.

Lower prices will come now be­cause Trump in­sisted that the USMCA trade pact al­low greater ac­cess to Canada’s highly pro­tected dairy sec­tor. The new pact will give dairy-pro­duc­ing states such as Wis­con­sin free ac­cess to just un­der four per cent of Canada’s dairy mar­ket, rep­re­sent­ing about $70 mil­lion.

That doesn’t seem like much but it’s a good start. Al­ready Canada’s dairy sec­tor is com­plain­ing bit­terly over this small con­ces­sion. Trump’s de­mand brought a small but no­table last-minute com­pro­mise by Prime Min­is­ter Justin Trudeau, who had first sworn not to give up a sin­gle glass of milk to the U.S.

Trump took Canada’s dairy tar­iffs se­ri­ously. Since the 1970s, Canada’s dairy in­dus­try has set its whole­sale prices and then got gov­ern­ments to re­in­force lim­its on sup­ply. Gov­ern­ments re­stricted do­mes­tic sup­pli­ers with quota al­lo­ca­tions and kept out Amer­i­can and for­eign prod­ucts with tar­iffs over 250 per cent.

The Cana­dian dairy in­dus­try al­ways hoped that Canada’s mar­ket was too small for the Amer­i­cans to no­tice.

But Trump did no­tice and Cana­dian fam­i­lies should be grate­ful.

In an ideal world, the suc­cess of trade agree­ments would be mea­sured by how they ben­e­fit con­sumers. But in a world of lob­by­ists, trade unions, home­town may­ors and cham­bers of com­merce, the op­po­site is true. Suc­cess is mea­sured in­stead by the ben­e­fit to pro­duc­ers.

Hence, Cana­dian politi­cians ral­lied in sup­port of dairy pro­duc­ers and ig­nored strug­gling con­sumers. U.S. politi­cians do the same to pro­tect sugar and soy­beans, and put up bar­ri­ers to lower-cost Cana­dian soft­wood lum­ber.

One Cana­dian politi­cian who called out the dairy lobby was Que­bec MP Bernier. The dairy lobby re­sponded by help­ing to de­feat his bid for the lead­er­ship of the Con­ser­va­tive Party. Bernier nar­rowly lost to an in­dus­try-pli­ant can­di­date (An­drew Scheer) be­cause of a surge of new del­e­gates from dairy re­gions in Que­bec. Bernier has since started a new party premised on break­ing up the dairy car­tel and oth­ers such as wire­less telecom­mu­ni­ca­tions.

Cana­di­ans are fi­nally start­ing to no­tice how per­ni­cious­ness gov­ern­ments do in­dus­try’s dirty work.

Some­times, in the rough and tum­ble of pol­i­tics, progress can be made for the con­sumer. With­out mean­ing to, Trump may have achieved that.

And Trudeau was smart enough to — al­beit un­will­ingly — let Trump help Cana­dian fam­i­lies.

LU­CAS OLENIUK TORONTO STAR

Ac­cord­ing to Pa­trick Lu­ciani and Owen Lippert, ‘the new United States-Mex­ico-Canada Agree­ment (USMCA) low­ered the dairy food bills for Cana­dian fam­i­lies — de­spite the op­po­si­tion of ev­ery Cana­dian mem­ber of Par­lia­ment, save Maxime Bernier.’

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