Canadian Dairy Farmers Aren't Happy With U.S. Trade Deal. Here's Why

Canadian and US negotiators reached a deal late on Sunday on reforming the North American Free Trade Agreement after more than a year of talks

Canada and the US reached a deadline deal on a new free trade pact that will include Mexico, the governments announced late on Sunday, after more than a year of talks to revamp a pact President Donald Trump had labelled a disaster.

The organization says the newly minted U.S. -Mexico-Canada Trade Agreement, or USMCA, will grant greater market access to the domestic dairy market and eliminate competitive dairy classes, which the group says will shrink the Canadian industry. "Versus a very unpredictable and protectionist USA administration, I think Canada did as well as it could".

The new deal, once ratified, will make it easier for the U.S.to enter Canada's restrictive dairy market, in which US imports are discouraged through supply management practices like high tariffs.

"Anything you submit to Congress will be trouble", he said.

A US official said a few minutes earlier that the United States and Canada were "very close" to a deal.

The deal is a reworking of the 1994 North American Free Trade Agreement (Nafta), which underpins $1.2 trillion in trade between the three countries. Starting in 2020, to qualify for zero tariffs, a auto or truck must have 75 per cent of its components manufactured in Canada, Mexico or the United States, a substantial boost from the current 62.5 per cent requirement.

The U.S. and Canada reached the basis of a free trade deal Sunday night, a senior Canadian government official said.

Ontario and Quebec premiers criticized the dairy concessions as a bad deal for farmers, though Foreign Affairs Minister Chrystia Freeland said at a press conference Monday that they would be made whole.

Like all negotiations, there was horse trading, but for the Canada there were elements of the new pact that could be viewed as victories.

In exchange, Canada and Mexico received relief from the impending vehicle tariffs Trump might impose. USMCA will "allow us to reclaim a supply chain that has been off-shored to the world because of unfair trade issues".

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"While it's possible to conclude that the deal consists largely of tweaks to the old agreement, we believe reduced uncertainty about the U.S".

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.

We looked through the blueprint and reached out to experts to get a better sense of what it does.

Ruiter said he had heard similar promises of support after the TPP and European deals were signed, but has never seen any compensation himself.

Canadian Prime Minister Justin Trudeau faces anger from dairy farmers but told journalists Monday that the deal overall would be "profoundly beneficial for our economy" and "the most important progressive reform for North American workers in a generation". That's a victory for USA dairy farmers, but could provoke some political turmoil for the Canadian government.

On Monday, free-trade veteran Brian Mulroney, noting that "the devil is in the details", nonetheless called the new agreement "a highly significant achievement" for Canada.

The U.S.is Canada's largest export market for wheat, with roughly 2.5 million tonnes - or about $550 million worth - of wheat and durum flowing south each year, said Steve. Dairy Farmers objected to this, too, but the once-obscure dairy classification had become a lightning rod of discontent for Trump.

"That tells me that there's an agreement that works for all of us, and so, to me, that's what we wanted all along", Perez said. The official was not authorized to speak publicly and requested anonymity.

He won a big concession by persuading Ottawa to take steps to open up its highly protected dairy industry - which has long blocked US competition with import quotas and tariffs as high as 300 percent. A similar agreement between Mexico and the US preserves duty-free access to the USA market for vehicles that comply with the agreement's rules of origin.

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