Read the Bloomberg story by Josh Wingrove and Sandrine Rastello here.
Just before midnight one spring evening, Canada’s envoy in Washington got a call from Commerce Secretary Wilbur Ross. Farmers in U.S. House Speaker Paul Ryan’s home state were up in arms over Canada’s rules and had gotten President Donald Trump’s ear. Ross was looking to David MacNaughton for help.
Agriculture is on the agenda Tuesday and Wednesday in the third round of talks between Canada, the U.S. and Mexico. The trio of ministers arrive to join talks Tuesday. When and where dairy comes up will be a key test of the link between Trump’s words and the actions of his negotiators. Emily Davis, a spokeswoman for U.S. Trade Representative Robert Lighthizer, declined to comment when asked if the U.S. will press for dairy reform in Nafta talks.
“There’s less pressure on that than was expected,” according to Quebec Premier Philippe Couillard, whose province is home to the most dairy farms in Canada. That may be because the U.S. doesn’t want to open up its own system of subsidies, he said last week in an interview at Bloomberg’s headquarters in New York.
“When you start putting something on the table, you have to be sure that the end result is exactly what you wish for,” Couillard said, adding he doesn’t take Trump’s public threats as gospel since in his view they are “mainly designed for the internal U.S. political environment.”
Industry, too, is in a holding pattern pending specifics from U.S. negotiators. “We haven’t really heard what he wants from the Canadian market,” Pierre Lampron, head of the Dairy Farmers of Canada lobby group, told lawmakers in Ottawa last week during Nafta hearings. The group anticipates the issue could come up in talks, but says the best scenario is for daily to be kept out of Nafta. “Our defensive position is not to give him more access to markets.”
The sector shouldn’t even be on the table, according to David Froelich, director of the Teamsters Canada dairy division, which represents about 5,000 workers in the industry. “The dairy supply chain wasn’t part of the original Nafta and it doesn’t make sense to include it now,” Froelich said by phone. “Should it be an issue, it’s going to be opposed.”
Dairy is nonetheless a perennial target in trade talks and was among the final issues to be nailed down in the Trans Pacific Partnership, from which Trump withdrew the U.S. after taking office. Trudeau’s predecessor announced C$4.3 billion ($3.5 billion) in funding for Canadian farmers to cushion the impact of concessions made in the deal to partially open the country’s dairy market.
With Canada’s negotiating team waiting to see what the U.S. wants on dairy, MacNaughton — recounting his conversation with Ross — isn’t taking anything for granted. “The best laid plans sometimes go awry,” the ambassador said.