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.