PM Trudeau defends Canadian dairy system
Trudeau defended Canada's dairy supply management system noting that every nation including the US defends its agricultural industries as much as it can.
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|Canada has a supply management system fodairy products, poultry and eggs. It is discussed in a recent Digital Journal article. Trump recently criticized the dairy system during a speech in Wisconsin a cheese-producing state. In an interview with Bloomberg television Trudeau points out that the US actually runs a dairy surplus with Canada. Trudeau noted that the system worked quite well in Canada and said: "Let's not pretend we're in a global free market when it comes to agriculture. Every country protects, for good reason, its agricultural industries." Trudeau made his response after Trump again attacked the Canadian dairy industry as well as lumber, timber and energy sectors. It is Canada that should be complaining about the energy sector under NAFTA. If Trump's slogan is America First, under NAFTA Canada comes second.|
The proportionality clause says that if the government of any NAFTA member country takes action that cuts the availability of energy for export to another NAFTA member country, it must continue to export the same proportion of total "supply" that it has over the previous three years. If it cuts energy available for export to another member country, it must also cut the supply of that energy domestically to the same extent.The proportionality rule means that Canadians cannot have priority access to their own energy supplies. Richard Heinberg, a noted California energy expert said that proportionality is unique in all of the world's trade treaties. Heinberg claims that "Canada has every reason to repudiate the proportionality clause, and to do so unilaterally and immediately." With the opening of NAFTA Trudeau has every opportunity to do this. However, he has yet to reveal what he intends to change. He has not mentioned this clause, no doubt for good reason. The US would never accept it being dropped. The US wants Canada to be first and foremost a reliable source for oil and gas who will not put the needs of Canadians above those of the US.
The end is coming for Canada’s supply managed dairy market, not immediately, but almost inevitably. That’s not because U.S. President Donald Trump has claimed the Canadian system is unfair to U.S. farmers. The hypocrisy of a President who crows about an America First trade policy while demanding access to Canada’s market makes one of the best arguments for keeping the protectionist system. But the political market for supply management is weakening. For Canadian politicians, it will soon be more valuable to give it up in trade talks than it is to use it to buy the votes of dairy farmers.The article points out that from more than 100,000 dairy farms in Canada the number had declined to 11,260 in 2014. Half of these are in the province of Quebec but even there a Conservative MP Maxine Bernier is running for his party's leadership on a pledge to eliminate supply managed. It should be noted that the Conservatives have only 5 seats in Quebec in the federal government.