Canada pushes back against Trump attack on Canadian dairy industry

Canada's ambassador to Washington David MacNaughton on Tuesday sent a letter to the governors of two major dairy states to convince them that Canadian dairy policies are not the cause of financial loss for dairy farmers in the United States.

The letter was released by Ottawa on the same day as U.S. President Donald Trump signed the "Buy American and Hire American" executive order, which is widely seen in Canada as marking the start of the Trump administration's plan to renegotiate the North American Free Trade Agreement (NAFTA).

Canada's dairy industry was less protectionist than its U.S. counterpart, the ambassador said in the letter.

He attached a February 2017 dairy outlook from the U.S. Department of Agriculture to his letter that he said indicates the "poor results" in the American dairy sector "are due to U.S. and global overproduction."

He wrote that "Canada's dairy industry is less protectionist than that of the U.S., which has employed technical barriers to keep Canadian dairy out of the U.S. market," and noted that U.S. exports of milk protein substances significantly increased from 33 million U.S. dollars in 2011 to98 million U.S. dollars last year.

The dairy sector and the wider agriculture industry are among the areas Trump targeted during a speech to factory workers in Wisconsin on Tuesday.

Canada's dairy supply management system is a "one-sided deal against the United States," which has resulted in "some very unfair things" against "our dairy farmers," said Trump.

Through NAFTA, U.S. dairy farmers are able to export ultra-filtered milk -- a high-protein milk concentrate used to make cheese and yogurt -- to Canada duty-free.

But after dairy farmers in Canada's largest province of Ontario complained about competing with lower U.S. prices for the milk product, the Ontario government changed the rules to allow local processors to purchase ultra-filtered milk from Canadian farms at competitive world prices rather than import the milk protein isolates from the United States.

A similar policy is being adopted across Canada, which prompted the governors of New York and Wisconsin, two major dairy-producing states, to ask Trump to take action.

"It is important that we ... not lay blame where it does not belong, for economic changes that are the result of global market trends," said MacNaughton. "The Canada-U.S. partnership is a model to the world. Let's keep it that way by working together, as we have done so often in our history, to make it even better." Endi