US Senators call for investigation into Canada’s dairy trade policies

01-Sep-2016 - Last updated on 05-Sep-2016 at 09:57 GMT

Two US Senators and dairy organizations are calling for an investigation into Canada dairy trade agreements.

Two US senators have alleged that Canada’s National Ingredients Strategy and Ontario’s Class VI pricing program violate trade commitments to the US by encouraging Canadian dairy farmers to purchase local milk products instead of US imports.

They are asking for an investigation into Canadian import practices of milk protein concentrates.

In a letter to US Trade Rep Michael Froman and Ag Secretary Tom Vilsack, Democratic Senator of Wisconsin Tammy Baldwin and Democratic Senator of New York Chuck Schumer wrote:

“It is troubling that these dairy pricing programs appear to be designed in ways to intentionally displace current US imports…. Companies from our states inform us that they have already lost considerable export sales as a result of the Ontario dairy policy introduced this past spring.”

Ontario's Ingredients Strategy was created to encourage value-added growth in dairy ingredients for both domestic and export markets, and to put Canadian dairy ingredients in a more competitive psotions, the Dairy Farmers of Ontario said in a statement.

However, the two US senators claim that the Ontario Class VI pricing program under the Dairy Ingredients Strategy discourages Canadian dairy farmers from using US dairy exports and incentivizes them to purchase local milk ingredients.

“It is our concern that the Class VI pricing program appears to be designed directly to incentivize the Canadian processors to shift to using more Canadian milk and dairy input, in essence penalizing them for the use of imported dairy inputs,” the senators wrote.

According to Baldwin and Schumer, Ontario’s Class VI pricing program was specifically implemented to displace dairy imports and that Canada intends to build upon the model and has plans to implement a similar policy throughout the country.

NMPF and USDEC express strong support

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) commended the the Senators’ efforts.

“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,” Jim Mulhern, NMPF president and CEO of NMPF said.

“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 US-Canada relationship, cannot continue to erode the investments that US dairy companies have made in shipping to this market,” Tom Suber, president of USDEC added.