Quebec Premier Francois Legault stood at the microphone, his fellow premiers standing behind him at a downtown Washington Hotel, and said the goal is no tariffs with the Americans. Moments later, asked about allowing greater access for American dairy products, Legault was clear: Dairy is non-negotiable for Quebec.
This is the Canadian paradox: We are all for free trade with the Americans, but we want it to be a one-way street.
“I think the first choice is to have no tariffs,” Legault said of the best outcome for trade talks with the Americans.
If you spend anytime in Washington talking trade issues, especially trade across the Canada-U.S. border, you are going to hear about dairy. It’s been a major irritant for the Americans for decades under successive administrations, and it remains an issue today.
They aren’t asking or demanding that we as a country dismantle our supply management system, but they do want greater access. That was the question put to the premiers Wednesday morning before they headed out to Capitol Hill for meetings.
“The place to have those conversations is at the table with a review of the USMCA and a reconsideration of that agreement,” New Brunswick Premier Susan Holt said.
The next premier up to the microphone was Legault.
“For us, it is not negotiable,” Legault said.
That’s an odd position to take when you are arriving at someone else’s home asking for a favour, which is what the premiers are doing. The issue has already been raised with them in various meetings held over the last several days with U.S. senators and members of the House of Representatives. It’s also been raised by trade officials, and the issue has been ignored.
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In the last renegotiation of NAFTA, into what is now called USMCA or CUSMA, the Americans did get some concessions for greater access to dairy but immediately filed a trade complaint — which they won — claiming Canada was not living up to the newly signed agreement. Some adjustments were made, the Americans complained again — this time Canada won — but the issue remains an irritant.
In any negotiation, you need to be able to give and take and the American view of Canada — and this was often shared under the Biden administration, as well — is that Canada likes to take and not give.
Canada doesn’t sell much in the way of dairy products to the United States, and their share of our market is capped at 3.5% after which tariffs as high as 300% kick-in. We do sell them a lot of beef, though, and pork as well, and Canada is constantly looking to ensure that the United States doesn’t introduce what is known as country of origin labelling.
Our beef and pork producers fear that would hurt exports to the American market.
If we want to get, we need to give, and that might mean being less restrictive on dairy. Not giving up supply management, but allowing Wisconsin dairy farmers to sell their milk to Canadian cheese producers — because that’s where it goes, not into a carton in your fridge, but into cheese.
We are headed towards a renegotiation of CUSMA; it will likely happen as soon as Canada has a new government in place with a mandate to negotiate.
Each country has issues with the other and for a deal to be reached, that will require compromise on both sides. No one needs to play their hand before the poker game has started, but Canadians, especially Canada’s dairy farmers, better realize that their sacred cow is likely going to be on the table.
It would be utterly ridiculous to sacrifice an entire trade deal to continue protecting an ever shrinking number of dairy farmers to the degree they are protected now. Canadians can’t complain about Trump or Americans in general of being protectionists, while we defend our own protectionist policies.
We’ve been doing it for years, but it just won’t work going forward.