WASHINGTON — After advocating for federal aid for New York’s dairy farmers during the COVID-19 pandemic, Senate Minority Leader Charles Schumer is citing concerns that Canada is using unfair trade practices to hurt New York dairies.
Schumer urged U. S. Trade Representative Robert Lighthizer to raise concerns about Canada evading its commitments under the United States-Mexico-Canada Agreement (USMCA) to eliminate harmful dairy trade practices.
“New York’s dairy farmers are the lifeblood of the Upstate economy, but unfortunately, they have been squeezed by the economic effects of the COVID-19 crisis,” said Schumer. “That is why I am calling on Ambassador Lighthizer to do everything in his power to ensure that Canada abides by its dairy trade obligations and eliminates its unfair and harmful pricing programs and practices that unfairly impeded Upstate New York dairy farmers from freely selling their product – as agreed to in the new trade agreement with Canada, the USMCA. As the trade deal enters into force next week, it is imperative that our New York dairy farmers are able to sell their products into Canada and churn up profits that mitigate the huge losses they have suffered this year.”
“USMCA requires Canada to provide new market access for American dairy products and to eliminate its destructive Classes 6 and 7 milk pricing schemes,” said Jaime Castaneda, senior vice president for Policy Strategy and International Trade with the National Milk Producers Federation and the U.S. Dairy Export Council. “While not unexpected, Canada’s efforts to manipulate its agreed upon trade obligations to protect its tightly controlled dairy market are unacceptable. Canada needs to live up to the commitments it made to the U.S. on dairy. America’s dairy industry appreciates Senator Schumer for his leadership on this issue and we support Ambassador Lighthizer and Secretary Purdue as the U.S. works to hold Canada accountable to its commitments under USMCA.”
Schumer explained that under USMCA, Canada agreed to eliminate Class 6 & 7 pricing within 6 months. However, the Senator revealed, Dairy Farmers of Ontario (DFO), which represents approximately 4,000 Canadian dairy farmers, has recently requested that Ontario’s tribunal which provides an avenue of appeal on agriculture issues grant restricted access to DFO’s pricing regulations. Schumer argued that with only a few days left until the USMCA is set to enter into force, the lack of transparency and timing of DFO’s request raises questions about whether or not Canada is seeking to circumvent its dairy commitments in USMCA.
Additionally, Schumer pointed out, under USMCA, Canada agreed to an expansion of tariff rate quotas (TRQs) for several categories of U.S. dairy products. However, the U.S. dairy industry has raised concerns that Canada’s recently-released TRQ allocations weaken the intent of USMCA and will prevent New York dairy farmers from fully benefiting from the agreement’s expanded market access opportunities.
In a letter to the ambassador, Schumer wrote:
“We must ensure that hardworking dairy farmers in New York and across the country, who rely on strong trade enforcement from the U.S. government for protection against other countries’ unfair policies and practices, benefit from the changes in USMCA as intended. As such, I urge you to expeditiously raise these aforementioned concerns about Canada’s dairy obligations with your Canadian counterparts, and in particular, ensure Canada reaffirms its commitment that Class 6 and 7 will be fully, and permanently, eliminated.”