Dairy is not the only agricultural dispute between the United States and Canada, but it is the biggest one, according to Agriculture Secretary Sonny Perdue. Senior U.S. officials say the new NAFTA must include greater U.S. dairy access to Canada, and iPolitics, a Canadian news site, reported that ultra-filtered milk has been a focus of the discussions between the two nations.
Protein-rich ultra-filtered milk is used in dairy products such as cheese. In 2017, Canadian regulators created a new pricing category, called Class 7, that effectively restricts shipments of ultra-filtered milk from the United States. The Trump administration has said its goals for NAFTA include the elimination of Canada’s dairy supply management system.
“Dairy is the big issue,” but the United States also wants Canada to change its grading system for imported U.S. wheat as well as more equitable treatment of U.S. wine in British Columbia grocery stores, said Perdue in a USDA radio news service story. “Those are probably the irritants out there.”
President Trump has complained about high tariffs on Class 7 imports. Canadian leaders say they will stand firm in support of supply management. Canadian farm groups are wary, however, partly because Canada has agreed in two other recent trade pacts to allow more imports. Quebec dairy farmer Peter Strebel told Canadian Press that if supply management is weakened as part of the new NAFTA, “there would be a lot of bankruptcies. … It would be devastating.”