Vilsack: Modernize NAFTA to Take Canada's Thumb off the Scale of Dairy Trade

USDEC's president and CEO tells a Canadian business network that an updated free-trade agreement should confront Canada's protectionist dairy policies.

Speaking on a Canadian business news network, U.S. Dairy Export Council CEO and President Tom Vilsack called for a modernization of the North American Free Trade Agreement (NAFTA) that ends Canada's distortion of dairy markets.

"There are very technical issues, obviously, but at the end of the day this is about a fair and balanced market and allowing Canadian and U.S. consumers opportunities for quality at an affordable price," Vilsack said in a Monday Business News Network (BNN) interview.

"It's a question of making sure what you do from a government and policy standpoint doesn't put the thumb so heavily on the scale that it makes it impossible for exports to take place." 

In a news release issued last week, USDEC and the National Milk Producers Federation (NMPF) said it will work with the Trump Administration to modernize NAFTA. The main goals will be to safeguard open trade with Mexico and confront increasingly protectionist dairy policies by Canada.

Canada has implemented a new national pricing policy that effectively blocks some American dairy exports, such as ultra-filtered milk, to Canada while at the same time undercutting U.S. protein exports to other world markets. Even before that policy, the U.S. dairy industry was restricted by Canadian tariffs. Only limited market access is granted under NAFTA. 

"We want to make sure that the markets closest to home are free and fair and open, to be the best they can be," said Vilsack. "We obviously have concerns about Canada." 

BNN is Canada's only business and financial news network, available in about 4.5 million Canadian homes. The complete interview with Vilsack, a former U.S. Agriculture Department secretary and Iowa governor, can be watched by clicking the video above.

Mexico is the largest U.S. dairy export market, accounting for $1.2 billion in U.S. dairy exports last year. That's nearly double the size of Canada, the industry's second-largest market, worth $632 million in 2016. 

To increase trade with Canada, USDEC and NMPF are asking the Trump Administration for a "decisive confrontation and resolution" of nontariff concerns, including the removal of Canadian milk pricing classes 6 & 7, and the inclusion of Canadian dairy tariffs.

Mark O'Keefe is vice president of editorial services at the U.S. Dairy Export Council.

Learn more about U.S. dairy and NAFTA:

• Vilsack Tells Canada 'We Want an Open Market'
• Dairy Groups Pledge to Work With Trump Administration on NAFTA Modernization (news release)
• Full, written comments about NAFTA modernization sent to the U.S. Trade Representative by USDEC and NMPF.  (PDF download)
• Bipartisan Congressional Letter Voices Support for Tackling of Canada’s Protectionist Dairy Practices 
• Dairy, Ag Groups Urge President Trump to Act Immediately to Halt Canada's Continued Disregard of Trade Obligations 

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The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post.