“Overall, the U.S. is more restrictive,” said Peter Clark, a trade consultant and president of Ottawa-based Grey, Clark Shih & Associates, who has done research for the Dairy Farmers of Canada.
Is this a Nafta thing?
No, but Trump wants it to be. The original North American Free Trade Agreement didn’t really cover this, but Trump’s trade negotiators dropped a bombshell last October in Nafta talks when they proposed eliminating Canada’s system of supply management entirely over 10 years. Canada has refused. Paul Ryan is upset about Canada too, by the way.
What does Canada think?
It depends who you ask. Economists tend to loathe Canada’s system, saying that it means people pay more for staple foods. But politicians support it across the board. That’s partly politics -- dairy farmers are a powerful group -- and at least partly business. The existing dairy quota has become so valuable, worth billions of dollars, that killing it could ripple through the financial system and other sectors.
What’s the reaction to Trump?
Pierre Lampron, who heads the Canadian dairy farmer lobby group, said the U.S. market is vulnerable to milk surpluses and price crashes. “President Trump isn’t going after the system of supply management as much as looking to dump surplus subsidized U.S. dairy products on the Canadian market,” Lampron said. Trudeau, meanwhile, has pledged to defend supply management.
This article was provided by Bloomberg News.