Dairy farmers group say they're paying the price to seal trade deal

Dairy farmers group say they're paying the price to seal trade deal

What was formerly NAFTA is now the USMCA, or United States Mexico Canada Agreement.

It is the biggest-ever and the best trade deal in the world - that's how U.S. President Donald Trump and members of his administration are touting a new trade pact they have reached with neighbors Canada and Mexico.

A high-ranking team of Canadian officials, including Canadian PM Justin Trudeau, Canada's Ambassador to Washington David MacNaughton, and Foreign Affairs Minister Chrystia Freeland, were thrashing out the details of the deal via video conference with Washington over the weekend. This deal also allows added access to the Canadian dairy market, allowing the U.S.to sell $560 million worth of product to our neighbors in the north. The deal is likely to come into force by 2020, as it will have to be approved by Congress which will vote while it is in session next year. In addition, automobile machines should have at least 30 percent of the manufacturing done by workers earning around $16 an hour. But it's not the final step in the lengthy path to congressional approval on an issue that has served for two decades as a political football for US industrial policy and the loss of manufacturing jobs. Trump's advisers view the trade pact as a political victor in battleground states critical to the president's 2016 victory and home to tens of thousands of auto workers and manufacturers who could benefit from the changes.

The newly minted U.S. -Mexico-Canada Trade Agreement, or USMCA, will grant an expanded 3.6% market access to the domestic dairy market and eliminate competitive dairy classes, which will shrink the Canadian industry, according to a statement by Dairy Famers of Canada. "Our companies won't be leaving the United States, firing their workers and building their cars elsewhere".

They said NAFTA has had many positive benefits, including "dramatically higher trade" among the three countries, especially in the agricultural sector.

Canada's dairy market: The USMCA gives the US more access to Canada's dairy market than what was allowed under NAFTA. That if he talks tough enough, threatens tariffs and imposes tariffs, he can walk away with a deal that he likes. For example, it agreed to retain a NAFTA dispute-resolution process that it wanted to jettison but Canada insisted on keeping.

"It's disappointing for sure, because the Canadian government was saying we wouldn't lose any more of our market", said Mickey Aylard, president of the Vancouver Island Milk Producers' organization. "It's been very bad for the United States, it's been great for Canada, it's been great for Mexico - very bad for us".

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The new agreement ends the discriminatory pricing and restricts Canadian exports of dairy powders.

Other trading partners had been tough on the U.S., he said, including the European Union, which introduced retaliatory tariffs on United States goods in June.

Jerry Dias, president of Canada's largest private-sector union, Unifor, said he was thrilled the auto tariff threat has been lifted.

The agreement is still awaiting ratification in all three countries, but for consumers in B.C. we'll soon see some changes to where we can buy USA wine, in USA dairy-product selection and duty-free limits.

The USMCA is still built on the framework of NAFTA, free agriculture trade flowing through North America.

Ultimately, Beijing may not have as much firepower as the USA to retaliate, given the U.S. buys much more from China than it sells.