New year, new era

BURNABY – A new administration in the US this month is raising hopes for fewer trade hassles in the months ahead.

“I expect more predictability and more following the rules,” federal agriculture minister Marie-Claude Bibeau told farm media last month regarding the new US administration.

She had previously announced that Canada would not make additional concessions on market access in future trade negotiations as part of an announcement that a total of $4.3 billion would be paid to dairy producers by 2024 for concessions granted to the EU and trading partners around the Pacific.

However, the pledges came as US Trade Representative Robert Lighthizer launched the first enforcement action under CUSMA, the successor to NAFTA, over the tariff rate quotas (TRQs) under which Canada grants domestic dairy processors allocations of 14 types of imported dairy products.

“Canada’s measures violate its commitments and harm US dairy farmers and producers,” Lighthizer says. “We are disappointed that Canada’s policies have made this first ever enforcement action under the USMCA necessary to ensure compliance with the agreement.”

Lighthizer issued a letter December 9 demanding consultations with Canada, threatening to escalate the matter to a dispute settlement panel if those consultations are not successful.

However, the US dairy industry has yet to take full advantage of what they’ve got.

During the BC Milk Marketing Board’s fall producer meeting on November 25, board vice-chair Tom Hoogendoorn reported that butter and milk powder were the most common products arriving from the US, at 22% and 9.5% of allocations, respectively. All other categories saw fill rates of less than 3%; no US fluid milk entered Canada.

“I guess their distribution channels aren’t really set up yet to bring all their product in,” Hoogendoorn speculated.

Dairy Farmers of Canada, which objected to implementation of CUSMA on July 1 before the end of the last dairy year, dismissed the move as mere politics. (Lighthizer is a political appointee; president-elect Joe Biden has nominated Katherine Tai to be his successor in the new administration.

“TRQ allocations by the federal government are consistent with the terms of the agreement,” says DFC CEO Jacques Lefebvre. “Anyone who reads the text of CUSMA would see this, but the outgoing administration may feel that, by taking this approach, it will endear itself with family-owned dairy farms in the US.”

Other products have also been in the crosshairs of the outgoing administration. Raspberries, blueberries and greenhouse vegetables have all been the target of sabre-rattling. Southern US blueberry growers formed a new lobbying alliance on December 16 to address the question of imports; while Peru and Mexico were the targets, rather than Canada, the pressure on producers in Canada is clear.

Hoogendoorn says strong domestic support is producers’ greatest asset. When consumers have a choice, they’ll buy local over imports.

“We do know that the public really wants Canadian, domestic milk,” he says. “That’s our ace in the hole.”