WASHINGTON, Sept. 7, 2016 - Senators Chuck Schumer of New York and Tammy Baldwin of Wisconsin are urging U.S. Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack to investigate new Canadian dairy pricing policies that the Democratic lawmakers say are harming farmers in their states already suffering from depressed milk prices.
Canada recently began imposing limits on U.S. milk imports and Schumer says it is considering even further restrictions. In a letter to the U.S. officials, the lawmakers charged that Canada’s actions fly in the face of current U.S.-Canadian trade agreements.
“It’s clear that Canada’s new restrictive dairy trade and pricing polices are a blatant attempt to clamp down on American dairy products,” Schumer said in a release. “I’m calling on Secretary Vilsack and Ambassador Froman to ramp up their effort to immediately investigate these new, unfair policies already in place and those proposed for fall implementation.” Baldwin issued a similar release.
The lawmakers explained that Canada is looking at implementing this fall a National Ingredients Strategy, which reportedly takes a similar approach to Ontario’s new Class VI pricing program by incentivizing Canadian processors to shift away from using dairy imports from the U.S. Ontario recently implemented a targeted pricing policy that is designed to crowd out dairy sales from New York and Wisconsin and discourage Canadian cheesemakers from using imported ultra-filtered milk from the U.S. in their products. To date, companies in the U.S. enjoyed duty-free access for this specific product, an agreement Canada complied with under the North American Free Trade Agreement.
Companies in upstate New York such as O-AT-KA and Cayuga Milk Ingredients that rely on trade with Canada for a significant percentage – millions of dollars – of their revenue could be hurt by the new Canadian policies, as could dairy farmers in the Northeast and the Mid-Atlantic regions, Schumer said. Baldwin said dairy plants in her state have lost tens of millions of dollars in sales to Canada since the Ontario policy was implemented this spring. Wisconsin and New York are the nation’s second- and third-largest dairy-producing states, behind California.
Jim Mulhern, president and CEO of the National Milk Producers Federation, commended the senators for their push to have Canada’s policies evaluated.
“This letter comes at a critical time for both trade and the well-being of America’s dairy producers. We appreciate the senators’ attention to the importance of holding one of our largest trading partners to its international commitments and the key role that the U.S. government must play in doing so.”
Tom Suber, president of the U.S. Dairy Export Council, concurred, noting: “Canada has built up a deeply problematic track record of instituting program after program to intentionally erect roadblocks to dairy imports. This volatile situation with a country that should be one of our most reliable trading partners, given the strength of the U.S.-Canada relationship, cannot continue to erode the investments that U.S. dairy companies have made in shipping to this market.”
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