Canada-U.S. Relations Turning Sour Over Milk's Blog on Customs Brokerage and News Updates

Canada-U.S. Relations Turning Sour Over Milk

“Let’s not pretend we’re in a global free market when it comes to agriculture,” said Prime Minister Trudeau during a Q&A session with Bloomberg television earlier this week. His clear and up front challenging answer was a rebuttal to Donald Trump’s latest anti-trade tirade. The President seems to have decided to turn his attention to Canada’s dairy industry – while in Wisconsin, a state which is highly dependent on its agricultural sector, Trump openly blamed Canada for the hardship endured by local farmers. Since then, Canada has been playing it cool, pushing back with facts and a public relations strategy aimed at helping Americans and their political master understand that Canada is not to blame for current problems.

The President is clearly using his bully-style tactics to shake things up a bit before heading into NAFTA renegotiations. “Canada, what they’ve done to our dairy farm workers, is a disgrace. It’s a disgrace,” Trump said. “Rules, regulations, different things have changed. And our farmers in Wisconsin and New York State are being put out of business.”

Canada’s Ambassador to the United States, David McNaughton shot back at the President’s comments in a letter sent to the governors of Wisconsin and New York: “Canada does not accept the contention that Canada’s dairy policies are the cause of financial loss for dairy farmers in the United States,” states the Ambassador in his letter. “The facts do not bear this out.”

Trump’s new found passion (or hatred) for Canadian dairy producers didn’t just happen overnight. There has been a brewing spat between the U.S. dairy lobby and Canada’s dairy industry. The Americans are accusing Canada of “systemic disregard” of its trade obligations, and Canada is accusing its American counterparts of “scapegoating”.

The U.S. dairy industry groups have been lobbying Trump for more support and he is all too happy to jump on board the band wagon. Just recently as he was made aware that 70 dairy producers in both Wisconsin and New York had been affected by Canada’s decision to reclassify ultra-filtered milk, Trump has promised to work with Wisconsin’s congressional delegation to come up with a solution.

Honeymoon over

What seemed like a warm beginning in relations between Canada and the U.S., with the cherry on top being what some qualified as a successful trip to Washington D.C. by Prime Minister Trudeau in the early days of Trump’s administration, seems to have soured a bit.

“Any conversation around that starts with recognizing the facts. Now I understand how certain governors are speaking to certain constituencies on that. It’s politics,” mentioned Trudeau during his Bloomberg interview, adding “Different countries have different approaches and we’re going to engage in a thoughtful fact-based conversation on how to move forward in a way that both protects our consumers and our agricultural producers.”

In Ambassador McNaughton’s letter to the governors of the two states pushing the dairy issue, he clearly states that the plight of their farmers is not Canada’s fault, suggesting rather that it was caused by an “over-saturated” market which has lowered the prices. For the governors’ own insights, the Ambassador attached a report of the U.S. Department of Agriculture to his letter which he said “indicates that poor results in the U.S. sector are due to U.S. and global overproduction. As made clear in the report, Canada is not a contributor to the overproduction problem.”

Vowing to use the “sledgehammer” as a solution to the dairy problem, Trump laid out his plan in regards to the issue: “We’re going to get together and we’re going to call Canada, and we’re going to say, ‘What happened?’ And they might give us an answer, but we’re going to get the solution and not just the answer, because we know what the solution is.”

Isabelle Bouchard, director of communications and government relations at Dairy Farmers of Canada sums up the situation quite well: “To use a phrase that has recently come out of the U.S., Wisconsin farmers are using alternative facts,” adding “The Wisconsin people are trying to find an enemy…”