May 07, 2017

More trouble with trade? EU wary of Canada’s protectionist dairy practices too

Holly NicholasRebel Commentator

President Trump isn’t the only one Trudeau has to worry about on trade deals. European Union Commissioner for Agriculture Phil Hogan says there are potential worries with the Canada European Comprehensive Economic Trade Agreement (CETA) set to take effect in July. 

The worry relates to a controversial new and lower priced milk category that Canada brought in to incentivize Canadian dairy farmers to produce diafiltered milk in order to push out the U.S. because Canadian dairy farmers can’t compete.

Watch as I explain how this is really yet another protectionist measure from the government to shield Canadian dairy farmers from competition.

Under CETA 18,000 tonnes of cheese from the European Union should gain access to Canada tariff free, which is about 2% of the Canadian market. Canada will also gain duty-free access to the European market.

Currently, there’s a 250% tariff on European cheeses entering Canada with another point of contention being Canada’s restrictive supply management system.

The vicious cycle of protectionist measures like supply management can at times mean billions of taxpayer dollars in government subsidies granted to farmers to help them compete.

It’s a lose-lose situation where farmers are expected to pay ridiculous amounts of money for quotas and consumers pay more for everyday dairy products.

This is a contentious issue but for his part, Hogan has said abolishing the system made Europe more competitive and it’s likely such a move in Canada would also benefit us all in the long run.

Comments
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commented 2017-05-08 16:37:40 -0400
Duties serve only to discourage the increase of surplus product, and consequently discourage the improvement and cultivation of land. Raising the value of surplus produce in a free market, through decreasing taxes, bureaucratic regulations and fees; encourages increase, and consequently the improvement and cultivation of the land. (Adam Smith, Wealth of Nations, 1776)

Since Pierre Trudeau’s government introduced Supply Management in 1971, the number of dairy farmers in Canada has plummeted from 145,000 in 1970 to 12,746 in 2011(SPP Research, University of Calgary, “Supply Management: Problems, Politics and Possibilities, 2012). The cost of production in Canada due to bureaucracy is roughly double that of other competing nations: average cost per hundredweight of dairy products in ”tweet-url cashtag" href=“https://twitter.com/#!/search?q=%24USD” title=“$USD”>$USD; New Zealand $15, Australia $15, United States $15, European Union $17, Canada $32. (International Dairy Foods Association, 2010).

CETA will allow for dramatically lower priced EU dairy products to flood the Canadian market. Increased Supply Management will further decrease competitiveness for domestic producers, as, it is likely the EU products will be permitted to enter the Canadian market without tariffs. As expected, instead of backing down, the Liberal government is doubling down on government regulations, and bad policy. Christia Freeland is obsessed with Left-wing, Globalist ideology and Canada becoming part of the “Open Society”, despite the consequences. Increasing Supply Management will result in lowered competitiveness, and the bankruptcies of even more dairy farmers in Canada.

Supply Management in Canada: https://www.policyschool.ca/wp-content/uploads/2016/03/supply-management-hall-findlay.pdf
Chystia Freeland on CETA: http://business.financialpost.com/news/economy/chrystia-freeland-urges-building-bridges-not-walls-to-trade-following-canada-eu-agreement
Dr. Milton Friedman on Price Controls: https://m.youtube.com/watch?v=UGKl1MzOc8k
Dr. Lawrence White on Dr. Friedrich Hayek’s “Road to Serfdom”: https://m.youtube.com/watch?v=NStwnOh9AsU
commented 2017-05-08 13:00:49 -0400
Trudeau will not be happy until he has transformed Canada into a 3rd World Basket Case, controlled by his friends, the Savages.
commented 2017-05-08 13:00:49 -0400
Trudeau will not be happy until he has transformed Canada into a 3rd World Basket Case, controlled by his friends, the Savages.
commented 2017-05-07 23:21:31 -0400
Carole Massé Another thing i find funny about progressives and marxist leaning progressives is that they complain about stores like Wal Mart and all the crap from China they sell, yet they will not utter a damn peep as Justin sells us out to China and makes it so there are more Chinese products with much lower safety standards being sold here. The second we have a milk scare or something worse than a scare they will be out there blaming it on someone else.
commented 2017-05-07 22:49:11 -0400
Holly, another advantage in dropping Supply Management is the hundreds of millions in Gov’t costs to monitor it. Will Trudeau give these Gov’t workers another job ? Probably, it isn’t his money.
commented 2017-05-07 22:09:39 -0400
Now I see why cheese costs more as a pizza topping.
commented 2017-05-07 21:28:52 -0400
That is only one of the problems with globalism. You must compete internationally, thus you have to lower your prices until you go out of business. Farmers in France too are suffering. Wait to see what will happen when Trudope signs a free trade deal with China. We should stop altogether producing milk right away. Another aspect that is ignored here is what about the quality? Bof, nobody cares, money talks, the rest walks. And the rest is all of us.