Mexico is the largest importer of U.S. dairy products and absorbs 40% of what the United States exports. Canada is number three on the list. The United States is at risk of losing $5.4 billion in milk exports without acting quickly to reach a strong trade agreement with one of the world`s largest milk buyers. However, if two more trade agreements are considered (the comprehensive economic and trade agreement with the European Union and the comprehensive and progressive Trans-Pacific Partnership), about 18 per cent of the Canadian market will be directed to foreign milk producers. The budget also indicates that there may be more money available, as the government is cooperating with industry “to address the transformational implications and potential effects of the Canada-U.S.-Mexico agreement.” Ottawa then agreed, as part of the 11-nation Trans-Pacific Partnership trade agreement, to give participants greater access to Canada`s milk, egg and poultry markets. The budget provides $1.5 billion for farmers who lose money if they sell their production rights in the supply management system that limits the production of eggs, poultry and milk in Canada. To obtain the right to sell supply-run products, farmers must purchase “quotas,” often from existing producers who wish to leave the sector. Reed said the new agreement would stabilize the milk and auto industry and open up opportunities for e-commerce in the future.
“We have not escaped the fact that dairy farmers have paid a considerable price for bringing this trade agreement into force. And it has not escaped us that it will come into force on Canada Day. To do that, we have abandoned part of our sovereignty,” he said. Stan Ryan describes the same competitive conditions that a modernized NAFTA should create and explains why booming milk exports to Mexico and Canada are essential to the economic prosperity of the United States. READ: Canadian milk producers in Trump – they`re trying to get us out of jobs and economic growth are on the right track – and not just for dairy products – when Congress looks at the U.S.-Mexico-Canada agreement (USMCA). But when Stephen Harper was Prime Minister, the Conservatives opened the door to change when they agreed to ease restrictions on imports of European cheese through the Canada-EU trade agreement, signed under Trudeau`s Liberals and entered into force. Current U.S. free trade partners account for 55% of U.S. milk exports.
Mexico alone accounts for more than 24% of all U.S. milk exports. As a result of the implementation of the North American Free Trade Agreement (NAFTA), U.S. dairy companies export duty-free to Mexico. But there are many countries where U.S. dairy products do not get as favourable market conditions. Charlebois sees the three agreements with the most important impact. Some of the recent developments, which have had a significant impact on U.S. milk trade, are: the value of U.S. commercial dairy exports has increased significantly since the mid-2000s. Before that, there were sporadic periods of significant milk exports, but often subsidized by the U.S. government.
The United States competes with other major milk suppliers, such as New Zealand, the European Union (EU) and Australia. He expects the agreement to be more effective in Ontario and Quebec because of the number of milk processors compared to Atlantic Canada. NMPF and USDEC are working hand-in-hand on trade issues that will affect milk exports to China, Mexico, Canada, Japan, Vietnam and other countries. For many islanders, October 5, 2018 is a date that stands out. On that day, more than 100 farmers showed up at Pooles Corner for an unrelated funding announcement by then federal Agriculture Minister Lawrence MacAulay to protest the trade deal. READ: Could Trump save dairy industry