You Can’t Really Call the Status Quo With Canada “Free Trade”

Unless you think a 270 percent tariff is “free.” This article is from last year, and from Canada. A guide to understanding the dairy dispute between the U.S. and Canada

The problem with saying Trump is attacking “free trade between Canada and the USA” is the dairy tariff Canada imposes.

Why are U.S. dairy farmers mad at Canada?

Canada has long maintained a high tariff wall on most dairy products. The duty on milk is 270 per cent. That keeps most imports from the United States and elsewhere out of Canada, while helping to prop up higher domestic prices. One notable exception is ultrafiltered milk and other protein-rich dairy ingredients used to make dairy products such as cheese and yogurt. North American free-trade rules do not cover these ingredients, so they enter Canada duty-free. And in recent years, U.S. dairies have developed a booming business selling these low-cost products to dairies in Canada ($133-million last year). That all changed about a year ago, when Canadian dairy farmers and producers moved to close the breach in the tariff wall with a new “ingredients strategy.” They persuaded regulators to create a new lower-priced class of industrial milk as an incentive to get dairies to produce protein substances in Canada, using Canadian milk. The result was predictable: U.S. imports fell in 2016, and are declining sharply so far this year. [2017]

Doesn’t sound too much like free trade to me, no matter how the chattering classes try to spin it.

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