U.S. Sen. Kirsten Gillibrand, D-N.Y., sent a letter to U.S. Trade Representative Robert Lighthizer on Tuesday calling for provisions in new North American Free Trade Agreements with Canada to protect dairy farmers in states bordering the Great White North as negotiations continue into their fifth day.
During a teleconference Tuesday, Gillibrand said the nation’s trade agreements with Canada must end unfair trade practices to help state dairy farmers who are struggling in a period of overproduction and low prices.
Negotiations with Canada started early last week, and a new agreement had not been reached after four days.
“Canada has been unfairly subsidizing its own products for years and U.S. products cannot compete,” Gillibrand said Tuesday. “Our dairy farmers are struggling.”
The average state milk price in July was $16.10 per hundred-weight, down from the previous month’s price of $16.90 per hundred-weight, according to the most recent data from the U.S. Department of Agriculture. The all milk price was $18 per hundred-weight in July 2017.
“In the grand scheme of things, Mexico is more important to the dairy industry, because they have the highest consumption of dairy products,” said Eric Ooms, a co-owner of A. Ooms and Sons dairy farm in Valatie. “As a New Yorker, though, Canada is more important because they are our direct neighbors. And regardless of what you think of [President Donald Trump], no dairy farmer would say he is wrong about Canada.”
Two dairy cooperatives in northern New York built plants in Canada, approved by the World Trade Organization, to sell milk concentrate in the Canadian market, until Canada created a new class of milk — Class 7 milk — that American products fall under, and then set the prices for that class of milk artificially low, Ooms said, adding Canada’s move made it impossible to do business in Canada.
Products from the Ooms farm principally go to the market in New York City — something that provides the farm with a little extra cushion, but does not make the farm impervious to national supply and demand trends, Ooms said.
“Our local dairy farms are seriously struggling and I will support action taken to help them,” said Assemblyman Chris Tague, R-102. “We need to do everything we can to protect the tradition of American farms and farmers. Some of these farms have been held by the same family for generations and are being forced to close their doors. If we don’t help them, we don’t eat. It’s that simple.”
Tague, who grew up on his grandfather’s dairy farm in Schoharie and ran it from 1987 to 1992, expressed concern about the U.S. continuing to import Canadian dairy products during a time of overproduction at a round table discussion Aug. 24 with local farmers and the U.S. Secretary of Agriculture in Schodack Landing.
Tague argued the U.S. should put native dairy farms before foreign dairy.
“I don’t really fear imports from Canada, because as the world gets smaller, you have to expect you can compete with other countries’ products,” Ooms said. “Canada has very protectionist policies for dairy and wine.”
The provincial arrangement of Canadian territories also poses a problem with provinces passing the blame for protectionist policies off to one another, making negotiations impossible, Ooms said, adding the policies leave tons of milk produced in the U.S. without any place to go.
“Those plants up north can make 10 loads of concentrate a day,— that is about a half-a-million pounds of milk a day without a place to go,” Ooms said. “I was at a meeting the other day, and a representative from the Canadian market admitted it uses protectionist policies. We could win a World Trade Organization case against Class 7 milk, but it would take a long time. People can’t wait that long because they have to move their products.”
Gillibrand’s letter lists out three provisions that need to be added to the NAFTA agreement with Canada:
• Eliminate tariff rate quotas, which is an import threshold for a protected domestic product coupled with high tariffs for any imported products above that threshold.
• Eliminate provincial policies that stand in the way of trade negotiations including regional milk pricing and policies that prevent processors from incorporating U.S. dairy products.
• Restrict the use of labels on products that couple the location the product was produced with the product itself, such as Roquefort cheese, Sherry and Tuscany olives.
U.S. Rep. John Faso, R-19, called for the same provisions in letters to the president and Lighthizer in April.
“I’ve met with countless dairy farmers in Upstate New York that have been hurt by unfair trade practices and Canadian pricing schemes,” Faso said. “In April of 2017, I urged the White House to address Canada’s protectionist dairy policies in trade negotiations. We must work on numerous fronts to ensure that dairy farmers in New York do not have their livelihoods taken away due to factors outside of their control.”
Trump indicated Aug. 29 the U.S. may enter into a new agreement with Mexico and leave it up to Canada if the country wants to join, but later on, the White House agreed to give the negotiations more time.