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DFC expresses concerns over CUSMA

If trade thresholds are exceeded, significant penalties are triggered, which would have the effect of limiting the competitiveness of Canadian dairy on the global market.


December 16, 2019
By Bakers Journal


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Dairy Farmers of Canada (DFC) President Pierre Lampron reacted swiftly to the news that the Premier of Quebec, François Legault, had urged the Bloc Québécois to move quickly to ensure the passage of Canada’s new trade agreement with the U.S. and Mexico (CUSMA) stating that it was in “Quebec’s best interests.”

If enacted, the agreement would transfer the equivalent average production of some 520 Quebec dairy farms to the United States. In turn, this US milk would replace the domestic production currently used in dairy products sold throughout Quebec and elsewhere in Canada. Furthermore, these products will not have to adhere to the same standards as those produced in Canada, such as the absence of artificial bovine growth hormones.

The agreement negotiated by the current government also establishes restrictive thresholds on exports of Canadian dairy products. If those thresholds are exceeded, significant penalties are triggered, which would have the effect of limiting the competitiveness of Canadian dairy on the global market. This would apply on exports to all countries, not just the United States and Mexico, and sets a dangerous precedent for future international trade agreements.

“Mr. Legault needs to appreciate that once this precedent is established, other sectors could be subjected to similar measures in future trade agreements,” added Pierre Lampron, President of DFC in a press release. “If the concerns of dairy producers and workers in the aluminum sector are not enough, defending the future interests of all of our export sectors should be reason enough for Premier Legault to reconsider his request to the Bloc – that would be in Quebec’s best interests.”

The agreement can be adapted on key provisions affecting the dairy sector without compromising its integrity through a number of means available to the parties.

“Mr. Legault certainly did not consider that, in a parliamentary system, all bills, including those aimed at ratifying international agreements, are subject to a legislative process designed to improve them, and it’s important not only for the dairy sector, but also for aluminum workers, that this agreement be put through that process,” said Lampron.

“This would allow the government to implement the agreement in the sectors that will benefit from it while minimizing the impact on other sectors,” he concluded.

The 5120 dairy farms in Quebec generate a farm gate value of over $2.6 billion dollars. In Quebec, the dairy production and processing provide close to 83,000 direct, indirect and induced jobs and contribute $6.15 billion to the Canadian gross domestic product (GDP). Dairy production also generates taxes of $1.3 billion dollars.