CANADA TO ELIMINATE CLASS 7 BARRIER, ALLOW MORE U.S. ACCESS TO DAIRY MARKET

CANADA TO ELIMINATE CLASS 7 BARRIER, ALLOW MORE U.S. ACCESS TO DAIRY MARKET

The U.S.-Mexico-Canada agreement that will succeed NAFTA includes the elimination of Canada’s Class 7 dairy price system and greater U.S. access to the Canadian dairy market than offered in the TPP free trade agreement, said senior administration officials late Sunday. President Trump pulled the U.S. out of the Trans-Pacific Partnership as soon as he took office in 2017 and demanded the renegotiation of NAFTA.

The officials declined to say how large a share of the Canadian market would be open to U.S. dairy products. Canada has offered access to its tightly controlled dairy market as part of other recent trade agreements. According to the officials, the new trilateral pact, which will be called the U.S.-Mexico-Canada Agreement, or USMCA, includes provisions to prevent Canada’s supply management system from affecting the world market in dairy products.

President Trump has repeatedly criticized Canada on social media for the Class 7 system, which applies to ultra-filtered milk, a high-protein product used in making cheese and yogurt. U.S. dairy groups said the Class 7 system was created to shut off its shipments of ultra-filtered milk to Canadian processors.

The senior administration officials announced agreement on the USMCA an hour before the U.S.-imposed deadline for a deal. Leaders of the three countries will be able to sign the pact after a 60-day review period. Congress would vote on it next year. One of the administration officials described the agreement as “a great win for the president and a validation of his strategy for international trade.”

U.S. farm groups said their first goal in negotiations for the new NAFTA was to maintain duty-free access for farm exports to Canada and Mexico, followed by such issues as Canada’s supply management system for dairy, poultry, and eggs. The two U.S. neighbors account for a combined one third of U.S. food and agriculture exports and imports. Both nations run an agricultural trade surplus with the U.S.

 

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