Amid rumors that Canada will offer concessions on dairy trade, former prime minister Brian Mulroney said he would be surprised if the new NAFTA did not include “flexibility” on the country’s supply management system. Agriculture is a small part of NAFTA trade but it is a stubborn impediment in U.S.-Canada negotiations.
Mulroney, described by iPolitics as the father of NAFTA, told reporters on Tuesday that he would be surprised if a NAFTA agreement was reached “without showing flexibility on supply management by Canada.” He added that he did not mean elimination of supply management. “I always thought they should be more flexible than they were and my guess is that’s the way it’s going to turn out.”
Larger access to Canada’s dairy market would allow President Trump to declare a victory for U.S. farmers, said the former Canadian premier. Canada has agreed to dairy concessions in a free-trade agreement with the EU and in the 11-nation successor to the TPP. Trump pulled the United States out of TPP in his first days in office.
Two U.S. economists said in a note to clients that dairy concessions might not be sufficient to seal a NAFTA deal, reported CBC News. “Our baseline is that Canada will join the U.S.-Mexico agreement, making concessions on dairy, but that it likely will have to make some concession on dispute resolution as well,” wrote the Bank of America Merrill Lynch economists.
Two Canadian sources told Reuters that Canada would offer limited access to its dairy market. The news agency said dairy was one of three unresolved issues in the talks. The sources said Canada would offer concessions similar to those it made in the EU and TPP-2 pacts.