Ottawa-American criticisms of Canada’s dairy trade policy focus on many measures that are also employed in the U.S., says Al Mussell, Agri-Food Economic Systems Research Lead and author of a policy note on the issue.

The policy note provides a comparison of major elements of Canadian and U.S. milk marketing and trade policy and shows the U.S. itself employs many of the same types of measures that it has complained about Canada using. It also follows other distortionary practices that Canada does not.

“There are many similarities in dairy and trade policies between the U.S. and Canada”, Mussell says. “Oddly enough, these are the points that the U.S. has complained to Canada about the most vociferously.

“The US has objected to the allocation of dairy import permits by Canada to processors-but this is what the U.S. does. Canada allocates dairy import permits proportional to historical imports or output-so does the U.S. The U.S. has complained that Canada doesn’t fill some of its dairy import quotas-but the U.S. leaves many of its own dairy import quotas unfilled.

“But there are sharp differences in the share of dairy markets opened to imports-Canada opens a much higher share of its dairy market to imports under tariff-rate quotas than the U.S. does.

“In international relations, the pot can call the kettle black-but doing so doesn’t build trust, goodwill, or alliances and weakens credibility. But with so much now in play with Canada-U.S. relations, and the risk that some in Canada may turn on Canada’s own system, guided by this one-sided American narrative on Canadian dairy policy, the record needs to be set straight.”

The policy note goes through the details of Canadian and U.S. policies for tariff rate quotas and allocation of import permits and finds major points of similarity and critical points of difference.

The policy note also describes important distortionary policy measures in the U.S. that pool milk revenue to advantage dairy manufacturing and non-tariff barriers relating to Grade A milk products that the U.S. employs that Canada does not.

Canada’s supply management system for dairy production is usually what gets much of the public attention on the issue in Canada and the U.S. The note shows a lot more is involved.

The note Throwing Stones from a Glass House: Understanding the US Narrative on Canada Dairy Policy can be accessed at www.agrifoodecon.ca

This news item prepared for National Newswatch