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Trudeau sets out to sell Canadians on trade pact

05 October 2018

According to farmers, the new deal will weaken the Canadian dairy industry by limiting exports and opening up the domestic market to more American products, concessions that could means hundreds of millions of dollars less in revenue for the industry, which now brings in about $5.9 billion in farm-gate revenue each year.

America's dairy farmers will have new export opportunities to sell dairy products into Canada.

Nationwide, reports suggest that the new trade deal will benefit American dairy farmers.

Above that level, US dairy farmers will still face Canada's punishing tariffs. Canada will provide new access for United States products including fluid milk, cream, butter, skim milk powder, cheese, and other dairy products. "This is the first time we are seeing measures like this in a trade agreement".

Wisconsin Farm Bureau Federation President Jim Holte says the agreement is welcomed "with opened arms".

The new deal makes enough Canadian auto exports tariff-free to be a de facto exemption, and gives hopes that metal tariffs could be reversed, said Frederic Bastien, an analyst at Raymond James in a note.

With so many dairy companies and fruit growers in the area we looked into what kind of impact this new deal could cause for them.

"One of the reasons they want access to Canada is so we can be a dumping ground for their surplus products", Wiens said.

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But she also notes that the prices that dairy farmers get on their products is due to a range of factors, including the fact that there has been a decline in fluid milk consumption by US consumers.

Dairy farmers say this new deal will mean extra out of pocket expenses, but until more details come to light, it is too early to put an exact dollar figure on just how much money they may lose.

"We had a NAFTA deal that was working reasonably well so we will call it a win because we were able to retain the key parts of the existing NAFTA deal in terms of our access to the USA market".

The MITC says past year 45% of ME exports went to Canada. A similar agreement between Mexico and the USA preserves duty-free access to the US market for vehicles that comply with the agreement's rules of origin. "Gaining access to a market that is literally one tenth the size of the United States won't be a solution to any of [American farmers'] problems", he told CBC London, Ont.

Also, steep tariffs that Trump imposed in May on steel from Canada and Mexico are still in effect; Robertson says Canada was hopeful the trade agreement could help change that.

He says the province does $389 billion worth of trade per year with the U.S.

"The unfair trade balance with Canada has been hard on the United States for many years", she said. Though, they argue that the policies are needed to compete with other countries that also protect their dairy farmers.

Some have characterized the side letter as effectively establishing a quota on the number of autos that can be exported to the USA - anathema to the very principles of free trade.

Trudeau sets out to sell Canadians on trade pact