Canadian dairy farmers claim the USMCA will undermine the industry by limiting exports.
Dairy Farmers of Canada issued a terse statement almost immediately after the 11th-hour agreement for the new USMCA was announced.
The organization said the newly minted US-Mexico-Canada Trade Agreement, or USMCA, will grant an expanded 3.6% market access to the domestic dairy market and eliminate competitive dairy classes, which the group says will shrink the Canadian industry.
It said the measures will have “a dramatic impact not only for dairy farmers but for the whole sector.”
US administration officials said the deal provides increased access to Canada’s dairy market for US producers and limits the American impact of Canada’s controversial supply management system for dairy and poultry products.
Prime Minister Justin Trudeau would only say it was a “good day for Canada” as he left a late-night cabinet meeting in Ottawa that capped several days of frenetic long-distance talks that included Foreign Affairs Minister Chrystia Freeland and US Ambassador David MacNaughton.
US President Donald Trump took to Twitter early Monday to praise what he called an “historic” deal that came just before US and Mexican trade authorities were set to publish their own trade agreement without Canada as a signatory.
The deal appears to preserve the key dispute-resolution provisions — Chapter 19 — which allow for independent panels to resolve disputes involving companies and governments, as well as Chapter 20, the government-to-government dispute settlement mechanism.
A side letter published along with the main text of the agreement exempts a percentage of eligible auto exports from the tariffs. A similar agreement between Mexico and the US preserves duty-free access to the US market for vehicles that comply with the agreement’s rules of origin.
Canada fought hard to retain Chapter 19, a holdover from NAFTA that US trade ambassador Robert Lighthizer worked tooth and nail to eliminate.
On the matter of Section 232 tariffs, Trump’s trade weapon of choice, US officials told a late-night conference call with reporters that the two sides had “reached an accommodation” on the issue.
The Canadian Chamber of Commerce said it was relieved that an agreement in principle had been reached. But chamber president Perrin Beatty said the details of the text needed a closer look before a final verdict could be rendered.