The new trade deal between the U.S., Mexico and Canada could change the prices on the next car you drive, the medicine you take, and the milk you drink. That dairy portion was a big sticking point in negotiating with Canada about their complex dairy tariff system, and the changes are drawing praise from Ohio’s dairy industry.
The deal, which still needs approval from Congress, ends discriminatory pricing and restricts Canadian exports of dairy powders. It also expands U.S. access to up to 3.75 percent of the Canadian dairy market (versus 3.25 percent in the Trans-Pacific Partnership agreement the Obama administration negotiated but Trump nixed his first week in office).
Above that level, U.S. dairy farmers will still face Canada's punishing tariffs. And the "supply management" system Canada uses to protect its farmers is still largely in place.
"This change in this agreement will open up those markets and allow us to compete again very effectively,” said Scott Higgins, CEO of the Ohio Dairy Producers Association.
Higgins says Ohio’s dairy industry is considered the 11th largest in the United States, and first in the nation when it comes to the production of Swiss cheese. Higgins says Ohio dairy farms bring 650 million gallons of milk and other dairy products to market every year.
Ohio dairy farmers might be celebrating the deal, but it was met with immediate criticism from their Canadian counterparts.
“This is a bad outcome for dairy farmers and the whole dairy sector,” read a statement from the Dairy Farmers of Canada. “The Government has conceded access to our domestic market to the US, affecting our ability to produce Canadian milk. By doing so, it is slowly bleeding Canada’s dairy sector.”
When asked if he sympathized with the Canadian farmers’ position, Higgins said, “We have a world to feed, and the United States has a tremendous capacity to produce milk, and we have a great product to market internationally. Of course we all want to protect and promote our products within our countries, but you can’t have it both ways. If you’re going to market all agriculture products in the United States from Canada, they’re going to have to give us equal access to their country, and to make sure that the pricing schemes that are established do not undermine our abilities to market internationally.”
Information from The Associated Press was used in this story