Suddenly, unexpectedly, in the midst of worsening tensions with North Korea and the risk of a major, possibly nuclear war that entails, U.S., President Donald Trump took aim at Canada and fire what sounded an awful lot like a trade-war shot across our bows.
But of all the things Trump had to pick as an excuse to get bigly tough with Canada on trade, why did it have to be dairy?
It’s not like Canada’s dairy industry, and the supply-management system underlying it, is a quick study. Far from it, trust me; You might want to consider being an avid supporter of reading the phone book, rather than go through the supply-management book of knowledge cover to cover.
I shudder to think about how much time Trump might want to spend listening to an aide trying to explain it, or reading anything more than a one-page brief on the topic.
I can almost sympathize after having to spend more than a few hours myself trying to get up to speed on things dairy. It turned out to be one of those frustrating experiences that initially defy all presumptions about where to find the information, who is in charge of decision-making, and who really knows what’s going on.
Considering how big an issue it had already become in the two, dairy-producing border states of Wisconsin and New York, big enough to lead to Trump’s unexpected shot at Canada, you’d wonder why it wasn’t already fairly big news in Canada as well. A healthy, heads-up for all concerned might have been a good idea, in retrospect.
But my search on the interrnet for Canada-related news regarding a change in federal government policy affecting our dairy industry came up empty. Turns out that’s because there has been no such change in policy.
Something called the “national ingredient strategy” is being quietly discussed. But no government officials are even involved in those talks. Instead they involve organizations representing dairy farmers, and dairy processing companies. “The strategy is being negotiated (between) producers and producers,” Chantal Paul, media spokesperson for the Canadian Dairy Commission, told me in an emailed response to questions.
The dairy commission is a federal Crown corporation with a mandate to help coordinate the activities of provincial dairy boards across the country, including implementation of the national ingredients strategy as it develops.
One part of the strategy began being implemented in February without much public attention outside the industry. The only news report I saw about it was published early last month by iPolitics, an on-line news venue that contacted the dairy commission and confirmed it had happened.
That first step in the new strategy involves the very thing at the root of the issue Trump raised this past week: a new or renamed Canadian class of milk product called Class 7, a highly-refined, dia-filtered, or ultra-filtered milk. It’s used in cheese production.
The price Canadian dairy farmers get for that product has been cut to help the Canadian dairy industry remain competitive in the over-supplied, price-challenged global milk market.
It appears the intent was not to undercut the U.S. product being exported to Canada for processing. Instead, I think it’s fair to say, Canadian dairy farmers took a pay cut to save their dia-filtered milk jobs jobs and help that aspect of their industry survive.
The Canadian government has not imposed a tariff and duty on imports of dia-filtered milk from the U.S., despite some misleading news reports.
Canada used to be a predominantly agricultural country. Whatever important happened in regards to Agricultural policy was very soon widely and publicly known. Governments could be elected or defeated depending on how well they handled the farm file. But those days are gone. That much became clear enough this past week as the mainstream media struggled to help the vast majority of urban Canadians understand what all the fuss was about after Trump’s outburst.
It’s not just about the future of Canada’s dairy industry of course. It’s about the future of the Canada’s trade relationship with the United States, and, therefore, our country’s economic well-being. Unfortunately, the future now appears to be in the dangerously unpredictable hands of one powerful man; a man who shoots first, and asks questions later, maybe.
The governors of Wisconsin and New York recently wrote letters to Trump about dairy farmers in their states allegedly being hurt by policy changes in Canada affecting their exports to Canadian processors. The total number of affected dairy farmers in both states combined was reportedly 75 operations.
Trump shook the trade ground under Canada’s feet with his suddenly aggressive comments during an “America-first” speech to workers at a tool factory in Wisconsin Tuesday. He said he was going to make sure that every trade deal the U.S. had with other countries was “fair trade.”
He paused for dramatic emphasis and added, “and that includes Canada because in Canada some very unfair things have been happening to our dairy farmers . . . what’s happened is very, very unfair.”
“But it’s not going to be happening for long,” he said, vowing “we’re going to call Canada and we’re going to say, ‘what happened?’
“They might get us an answer, but we’re going to get a solution.”
His tone was menacing. So much for just “tweaking” NAFTA, as Trump said during Prime Minister Justin Trudeau’s visit to Washington in mid-February.
Trump clearly doesn’t know all the facts from the Canadian point of view about what’s happening in the Canadian dairy industry to cause such concern in the two border states. But those facts likely won’t change his “America first” approach, not after the Wisconsin speech.
It appears the unpredictable U.S. president is in a warlike mood; and he has just declared a trade war on his country’s best friend.
A version of this was originally published in The Sun Times in April, 2017