Unions and Democrats raise concerns about USMCA


WASHINGTON—Yes, the leaders of Canada, the U.S. and Mexico have a deal on a new trade agreement.

No, that does not mean the negotiations are definitely over.

New Jersey Democrat Bill Pascrell, seen here during a television interview in New York on Oct. 17, 2017, says it’s not clear that the United States-Mexico-Canada Agreement makes things better for American workers. Pascrell is the top Democrat on a House subcommittee on trade which held a hearing on the USMCA on Nov. 15, 2018.
New Jersey Democrat Bill Pascrell, seen here during a television interview in New York on Oct. 17, 2017, says it’s not clear that the United States-Mexico-Canada Agreement makes things better for American workers. Pascrell is the top Democrat on a House subcommittee on trade which held a hearing on the USMCA on Nov. 15, 2018.  (Christopher Goodney / Bloomberg)

The legislatures of all three countries have to approve the new U.S.-Mexico-Canada Agreement for it to come into effect. And the Democrats who have won back control of the House of Representatives, one half of the U.S. Congress, have signalled this week that they are not ready to vote for the deal as it stands.

“There are certainly some improvements in the USMCA over the previous NAFTA, but the jury is still out as to whether this deal meets my standard for a better deal for American workers,” Rep. Bill Pascrell, the top Democrat on a House subcommittee on trade, said at a hearing on the USMCA in Washington on Thursday.

Trump’s team said it was designing a deal that would win the support of the U.S. labour movement, a key ally of Democrats and traditionally an opponent of trade agreements. But the AFL-CIO labour coalition said Thursday that it was reserving judgment.

“While there are positive changes in it,” such as improved terms on labour and manufacturing rules, “it is not obvious that the improvements are sufficient to make a meaningful difference to jobs and wages or to Mexico’s protection union regime,” AFL-CIO trade policy specialist Celeste Drake testified. She added: “Other rules in the agreement undermine the interests of working families.”

The complaints from the left have been largely centred on what they see as the weakness of provisions meant to compel Mexico to raise its wages and improve its labour standards. They see Mexico’s labour regime as one of the key reasons companies have shifted manufacturing jobs away from the U.S.

The Trump administration took steps to address Mexican labour, but unions and some Democrats say they have not done enough to guarantee the enforcement of provisions meant to compel changes. The left has also quibbled with particular provisions. Unions say, for example, that a new rule requiring a certain percentage of a car to be made by workers earning at least $16 (U.S.) per hour needs to be indexed to inflation so it doesn’t get softer over time.

Rep. Nancy Pelosi may be returned to her previous post as House speaker when Democrats take control in January. Under Pelosi, House Democrats took more than four years to approve trade agreements made by another Republican president, George W. Bush — and only after Democrat Barack Obama got elected and made changes to those texts.

“Right now, it is a work in progress,” Pelosi told the New York Times.

Changes could be made through either the main text of the agreement or through so-called “side letters,” like those added to the original NAFTA by Democrat Bill Clinton. The original NAFTA will remain in effect as the debate plays out.

At the Thursday hearing, representatives for the auto industry criticized the Trump administration for not removing its tariffs on imports of steel and aluminum from Canada and Mexico, saying the tariffs were raising costs.

They also warned that they would be hurt by the quotas Trump has been said to be considering in exchange for lifting the tariffs.

“We believe that imposing quotas on Mexico and Canada will also severely harm our global competitiveness by ensuring that the price of U.S.-made steel and aluminum will remain significantly higher than the prices paid for these commodities by automakers that produce their vehicles elsewhere,” said American Automotive Policy Council president Matt Blunt. “We have, therefore, urged the administration to move quickly and engage with Mexico and Canada to resolve these tariff issues, without resorting to quotas, prior to the signing of the USMCA later this month.”

Daniel Dale is the Star’s Washington bureau chief. He covers U.S. politics and current affairs. Follow him on Twitter: @ddale8


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Labour issues may hand Democrats the key to fighting USMCA


In conversation at the Institute of Politics at Harvard Kennedy School last month, Nancy Pelosi laid out her priorities should the Democrats regain control of the House of Representatives and should Pelosi reclaim the top job as Speaker.

HR1, she said, meaning House Resolution Number 1, would be campaign finance reform, followed by lowering the cost of health care, “building the infrastructure of America” (mass transit, schools, housing), protecting the Dreamers and passing the Equality Act amendment to the Civil Rights Act, thereby enshrining protections for the LGBTQ community.

Trump’s NAFTA plan could be upended by Democrats’ House takeover

U.S. midterm elections put USMCA in jeopardy

Now that Democrats are back in control of the House, it isn’t certain, but it is a reasonable bet, that Pelosi will re-emerge as Speaker. When she last took up that gavel in January of 2007 she delivered, within 100 days, on her promised legislative agenda, which included rescinding billions of dollars of tax breaks to oil and gas companies and raising the federal minimum wage, which the Democrats will fight for again, she vows.

What Pelosi has not put on her Top 10 list is passage of the United-States-Mexico-Canada Agreement (USMCA).

This shouldn’t come as a post-election surprise.

Those who lived through the first NAFTA recall the free trade expansion negotiated by the Republicans under George H. W. Bush in 1992, the opposition from the Democrats, and the 11th-hour conversion of Bill Clinton, who, as president, signed the trade deal into law late in 1993, but not before the ignored issues of the environment and labour were addressed.

By “addressed” I do not mean to suggest they were addressed effectively. Kept out of the main text, environment and labour were written in as side agreement addenda. The language was woefully lax. On labour, as I have written before, the signatories to the deal said they were “committed to promote” a few “guiding principles” governing “broad areas of concern.” The word flaccid does not do the deal justice.

The warnings raised by Democratic opponents were realized.

The labour rights of the Mexican worker would be ignored. There would be no enforcement of the right to collective bargaining. The suppression of wages for Mexican workers would see American jobs flood south of the border, as North American business exploited cheap labour.

The NAFTA accord marks its quarter century this January.

And where are we? In the new USMCA there is a direct labour chapter, with an annex specifically addressing worker representation in collective bargaining in Mexico.

Again, 25 years have passed and here we are. An excerpt: Mexico is to “provide in its labor laws the right of workers to engage in concerted activities for collective bargaining or protection and to organize, form, and join the union of their choice.” Employer “domination or interference in union activities” is to be prohibited. Discrimination against workers for union activity is to be banned.

There’s a seven-point directive as to what the new legislation is to cover.

We must wonder: how is it this was not enshrined decades ago? “It is the expectation of the Parties,” the annex concludes, “that Mexico shall adopt legislation described above before January, 2019. It is further understood that entry into force of the agreement may be delayed until such legislation becomes effective.” (Those italics are mine.)

On this issue of enforcement, we find such mewling language as “encouraging the establishment of worker-management committees” and “providing or encouraging mediation” and implementing undefined sanctions.

Little wonder there’s a growing expectation that the Democrats could seize the moment to call for changes to the labour chapter and, while they’re at it, push for new environmental standards, a back-to-the-future discussion, if you will.

None of this interferes with the timeline Prime Minister Justin Trudeau, outgoing Mexican President Enrique Pena Nieto and U.S. President Donald Trump continue to follow, that is, the formal signing of USMCA by month’s end. But that formality is just setting the stage for the tumult ahead.

Perhaps, as some have suggested, Trump will threaten to pull out of NAFTA altogether if the deal doesn’t advance through Congress after it convenes in January.

There will be the inevitable complaints about political opportunism on the part of the Democrats should they hold firm.

This ignores the failure of NAFTA in its first round: that it failed to enshrine labour rights as it advanced “freer, fairer” markets. The new deal promises the “protection and enforcement of labour rights, the improvement of working conditions, the strengthening of co-operation and the Parties’ capacity on labor issues.”

That isn’t much of a promise at all. And Nancy Pelosi knows it.

Jennifer Wells is a business columnist based in Toronto. Reach her on email: jenwells@thestar.ca


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Trudeau says he discussed USMCA with Mexico’s incoming president – National


Prime Minister Justin Trudeau says he has discussed the revamped North American free trade deal with Mexico’s incoming president.

Study says Canada needs trade with China, but the USMCA will make that more challenging

In a statement Friday, Trudeau said he spoke Thursday with president-elect Andres Manuel Lopez Obrador, who begins his term on Dec. 1.

The prime minister said the pair talked about the United States-Mexico-Canada Agreement (USMCA), which “removes uncertainty and supports stronger investment and exports.”

The two leaders also touched on disputed American steel and aluminum tariffs, imposed by U.S. President Donald Trump in June on national security grounds.

WATCH: ‘It started here’: Trump touts specialty milk part of USMCA deal to Wisconsin farmers

Canada and Mexico responded to the tariffs by imposing their own retaliatory levies on U.S. imports.

Kelly Craft, the U.S. ambassador to Canada, said at a business summit Friday in southwestern Ontario that Trump is reviewing the tariffs meant to protect U.S. industry.

“That is not something that is against Canada, it’s just something that’s protecting North America from other countries that will be passing raw materials through, and also to protect our steel industry at home,” she said.

U.S. Congress won’t vote on new NAFTA in 2018 — throwing wrench in trade deal’s timeline

David MacNaughton, Canada’s ambassador to the U.S., told the same Ontario Chamber of Commerce event that he hopes the U.S. tariffs will be lifted shortly, now that the new trade agreement is settled.

“I’m hoping that the steel and aluminum tariffs come off soon. Clearly during the negotiations the president made a point on several occasions, as did members of Congress, that the (tariff) action was not so much suggesting Canada was a national security threat, but to exercise leverage.”

The talks between Canadian and Mexican leaders came just days after Mexico’s future foreign minister, Marcelo Ebrard, was in Ottawa with Foreign Affairs Minister Chrystia Freeland.

Ebrard suggested the tariffs could be lifted once the new North American trade deal is signed.


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Trump appears to threaten USMCA deal when lashing out at migrant caravan – National



U.S. President Donald Trump appeared to threaten the newly minted Canada-U.S.- Mexico trade deal over a caravan of Honduran migrants trying to reach his country.

“The assault on our country at our Southern Border, including the Criminal elements and DRUGS pouring in, is far more important to me, as President, than Trade or the USMCA,” Trump tweeted. “Hopefully Mexico will stop this onslaught at their Northern Border.”

On Twitter, Trump said he wanted “Mexico to stop this onslaught,” or he will use the military to “CLOSE OUR SOUTHERN BORDER.”

Donald Trump threatens to take away aid from Honduras unless migrant caravan is stopped

Trump did not detail his military threat, nor his comments on the trilateral trade deal. Earlier this year, some National Guard members were deployed to the border on a limited mission that does not include contact with migrants.

More than 2,000 Hondurans are in a migrant caravan trying to reach the United States.

Mexico’s government says migrants with proper documents can enter and those who don’t either have to apply for refugee status or face deportation.

*with files from Global News



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Canada open to more China trade now that USMCA is done, Trudeau says


Canada is open to doing more business with China now that a trading agreement with the United States and Mexico has been finalized, says Prime Minister Justin Trudeau.

« Obviously, China is the world’s second-largest economy and growing, and will remain an important place to do business and to look for opportunity, » Trudeau told the Fortune Global Forum in Toronto on Monday.

« We will continue to look (at increasing trade), but we will continue to do it in the way Canada always has, mindful of the challenges, both of scale and of different approaches to business, in a way that is thoughtful about drawing benefit and protections for Canada. »

The prime minister noted that Canadian officials have been working over the past year to grow trade relations with China.

He said that under the newly agreed U.S.-Mexico-Canada Agreement (USMCA), all three countries now need to notify their trading partners if they engage in trade talks with any « non-market economies », including China.

But he noted that the « reciprocal » clause does not stop Canada from doing business with whom it pleases.

China has openly criticized Section 32.10 of the new USMCA, arguing that it is an attempt by the U.S. to thwart its trading relationships with Canada and Mexico.

The White House is currently involved in a trade war with China and has slapped tariffs on hundreds of billions of dollars worth of Chinese goods, prompting retaliation from Beijing.

In an interview on the stage at the start of the three-day conference, he described a tumultuous, and at times, testy negotiation process to get USMCA inked.

« I think what people will remember is where we ended up, » he told a crowded room of Canadian and international business leaders.

« In negotiations, people have different styles in their approach. We focused on staying constructive, thoughtful, present, at the table, patient. »

Trudeau said many had doubts about whether his government was going to be able to finalize the trade deal, which he touted as having reduced uncertainty for the Canadian economy.

« We have secured access to the U.S. market, quite frankly, at a time when a lot of investors that I have talked to around the world were wondering if we would be able to secure that, » he said.

« Obviously, the U.S. is going through, as it does from time to time, a bit of a protectionist phase and being able to ensure that investments in Canada will continue to have preferential access to the extraordinary market that is the United States is a big and important thing. »

Earlier this month, Ottawa announced that it had reached an 11th-hour deal with the United States and Mexico to modernize the North American Free Trade Agreement.

The trilateral pact, which still faces hurdles in implementation, is anticipated to protect billions of dollars of daily trade and support millions of Canadian jobs.


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Ottawa fires back at Ford over USMCA grousing


Put a sock in it, Doug.

That’s the message from Prime Minister Justin Trudeau’s government to Doug Ford in the wake of the premier’s grousing about Ontario being hurt by the new U.S.-Mexico-Canada free trade deal.

The federal Liberals are striking back at Ford over his charge that Ottawa “left out” key sectors in the new USMCA.

Intergovernmental Affairs Minister Dominic LeBlanc has taken the unusual step of publicly reminding the premier of his position during the contentious trade talks.

“Premier Ford fully supported Canada’s NAFTA negotiating position, both in public and in private,” LeBlanc told the Star on Friday.

“Just days before the deal was concluded, the premier was briefed in detail in Washington, D.C., including about the modest changes to the supply management sector,” the minister said, referring to concessions that give U.S. dairy farmers access to about 3.6 per cent of the Canadian market.

“The premier left that meeting and said publicly what he told us behind closed doors, that he stands ‘shoulder to shoulder’ with Canada’s negotiators. His … minister (Jim Wilson) even pleaded with us to get to a deal at any cost,” he said.

Ottawa is blasting Ford — who, associates say, has future national political ambitions — after he escalated his rhetorical attacks on Trudeau this week.

At a campaign rally Tuesday to mark his first 100 days in office, the premier lambasted the Prime Minister.

“The new deal leaves too many Ontario families and businesses out in the cold. The Trudeau Liberals left out Ontario farmers, they left out Ontario’s steelworkers and aluminum workers,” Ford told about 600 supporters in Etobicoke.

“They used Ontario jobs as a bargaining chip and Justin Trudeau is out there taking a victory lap without giving honest answers about … what he will do for the people he’s left behind,” he said.

“My message to the farmers, to the steelworkers, to the aluminum workers, to all of the business and workers in Ontario is this: Justin Trudeau may have forgotten about you, the Liberals may have forgotten about you, but we will never, ever forget about you.”

But an internal memo sent from Queen’s Park to Ottawa after Ford’s June 7 election indicates the two government were always on the same page.

“Ontario is supportive of Canada’s approach to the steel and aluminum tariffs issue and will continue to work with Canada on a consistent approach between both levels of government going forward,” said the provincial missive marked “confidential.”

LeBlanc stressed the USMCA is “a good deal for the hundreds of thousands of Ontarians who work in manufacturing, especially the auto sector.”

“It safeguards more than $2 billion a day in cross-border trade and tariff-free access that supports Ontario jobs,” the federal minister said.

Simon Jefferies, the premier’s press secretary, said Ford was a team player throughout the talks, but “the more we study this deal, the more concerned we are that the federal government threw hard-working Ontario farmers, and steel and aluminum workers under the bus.”

“Premier Ford did his part by connecting directly with the governors of Ontario’s largest trading partners to promote free trade and highlight the importance of our trading relationships,” Jefferies said Friday.

“While our government was relieved that a deal was reached, we have a number of questions (that) the federal government (has) been unable to answer in a briefing call and in followup letters,” the aide said.

“We remain highly concerned of the impact on supply-managed agriculture sectors and the compensation that will be provided for affected industries,” he said.

“We also have unanswered questions on the ability of Canada to negotiate future trade agreements, and the engagement plan with the U.S. to ensure tariffs are lifted on steel and aluminum.”

Despite being a newcomer on the national scene, Ford is already touted as a potential successor to little-known federal Conservative Leader Andrew Scheer if the Trudeau Liberals are re-elected next year.

The premier has privately joked that his bid to stop Trudeau’s carbon-pricing scheme better not be too successful because it could be a useful issue in a future federal election campaign.

“Everyone knows we’ve taken Kathleen Wynne’s hands out of your pocket,” he said Tuesday of the former Liberal premier he defeated last spring.

“Now, we all have a bigger job. But I promise you one thing: we’re going to take Justin Trudeau’s hands out of your pockets.”

Robert Benzie is the Star’s Queen’s Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie


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Ambassadors from Canada and U.S. launch town hall meetings to allay USMCA fears


Mounting concerns on both sides of the border are prompting the U.S. and Canadian ambassadors to meet with businesses in the wake of a new trade deal between the United States, Mexico and Canada.

In an interview with CBC Radio’s The House, U.S. Ambassador Kelly Craft said she and her Canadian counterpart, David MacNaughton, will embark on a series of town hall meetings to assuage fears from investors over the USMCA.

Craft also relayed a message for Canadians.

« I understand your frustrations, » she said of the fallout from sometimes fractious trade talks, while standing in the famous University of Kentucky athletics centre named after her coal magnate husband, Joe Craft.

The tensions created by the upheaval of the North American Free Trade Agreement and the birth of a new provisional pact (called the USMCA by U.S. President Donald Trump) have ignited uncertainty among investors.

Craft explained she and MacNaughton will travel around Canada and the U.S. speaking to cross-border industries and small businesses about the USMCA in an attempt to let them know the governments are listening.

The current plan is for two meetings each month, starting in December.

‘It’s not finished yet’

Touted as a solid deal for Canada by Trudeau government officials, Trump also hailed the USMCA as a big win for the new era of « America First. »

While both governments sort out the details and look for ways to use the deal to beef up their eventual re-election campaigns, businesses are still confused by what this means for them.

The USMCA still is not a « done deal, » said Ed Webb, the president and CEO of the World Trade Centre Kentucky. « It’s not finished yet. »

Canada is Kentucky’s largest foreign trading partner, with exports totalling almost $8 billion a year — more than the state’s next two largest partners combined.

But many investments have been halted until the new trade deal comes into effect and stability is re-established. That’s frustrating businesses in Kentucky  — and beyond. 

We need to be patient, we need to trust this will change.– U.S. Ambassador Kelly Craft

The state was also carefully targeted with retaliatory tariffs on products such as steel, playing cards and bourbon after Trump’s spring announcement that Canada would be subject to steel and aluminum tariffs.

Imposed by the U.S. administration on national security grounds, steel and aluminum tariffs became intertwined with the NAFTA negotiations, but Canadian officials failed to secure an exemption in the new text of the USMCA.

For the ambassador, it’s about playing the long game.

« We need to be patient, we need to trust this will change, » she said.

« The tariffs will at one point lessen. »

Car concerns

It’s not just the retaliatory tariffs Kentucky is concerned about. As in Canada, the possibility of a future bite from 25 per cent tariffs on autos is a staggering thought for the car industry in the Blue Grass state, which swaps millions of vehicles and parts across the northern border every year.

« We’re definitely concerned about how it affects our business with Canada, » Bruce Breitholle, the vice president of business operations at ATech, a company that builds training modules for auto manufacturers, told The House.

That concern was so overwhelming that it overtook the conversation at a business dinner Breitholle attended at the Kentucky Governor’s residence last month. The discussion quickly shifted to reassuring the Canadian attendees there was no animosity and that the Canadian market is a keystone of life in the southern state.

ATech automotive builds training modules for vehicle manufacturers. The company is concerned about what the USMCA will mean for their industry. (Elise von Scheel/CBC News)

ATech’s anxieties confirm the fears of Janet Harrah, a trade professor at Northern Kentucky University. She explained business is up in the state, but much of the growth is likely just inventory that was built up in anticipation of long-lasting tariffs — and that will harm Kentucky.

« If the cost of doing business here gets too high, people go somewhere else to do business, » she said.

Though the president has given Canada an exemption on auto tariffs — for now — it doesn’t come without conditions. If the U.S. moves forward with the imposition of worldwide Section 232 national security tariffs on autos, those would also apply to Canada.

Ottawa has effectively scored a temporary exemption, because Canada would still be able to export cars and parts tariff-free up to a certain amount well above what Canada currently sends south of the border.

Laura Dawson, Director of the Canada Institute at the Wilson Center speaks with CBC News Network about the new USMCA. 7:31

Even if the auto sector escapes punitive tariffs, the remaining steel and aluminum duties will drive up the cost of vehicles.

Cars are Kentucky’s biggest export to Canada. Auto manufacturing employs nearly 95,000 people in the state, according to the Kentucky Automotive Industry Association. The sting of new auto tariffs would be felt on both sides of the border, as about 130,000 jobs in Canada are based on vehicle manufacturing.

The Trump factor

As the U.S. leader throws jabs at Canadian officials, some in Kentucky’s business community expressed their embarrassment at the president’s behaviour.

« We don’t want to be seen as that big bad country, » Breitholle said.

« That’s the arrogance coming from way at the top. »

Despite the strain created by more than a year of negotiations, both Webb and Breitholle were optimistic no permanent damage would be dealt to the Canada-U.S. relationship.

The economic impacts, however, will be unavoidable.

How that trickles down and when those consequences will hit is the next big worry, Webb cautioned.

The USMCA still has to be approved by Congress, and ratified by all three North American nations.


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‘Our government sold us out’: Critics at Ontario agricultural fair fearful of USMCA


With major concessions from Canada on dairy, some Ontario critics say they’re concerned about what NAFTA’s proposed replacement means for the industry.

The provisional deal known as the United States-Mexico-Canada Agreement (USMCA) has plunged some dairy farmers into uncertainty, with some now concerned that they might not be able to survive.

The new deal would give U.S. farmers greater access to Canada’s dairy industry, worth about 3.6 per cent of Canada’s current dairy market, according to the Dairy Farmers of Canada.

Dairy farmer Vicki Cork has heard from Dairy Farmers of Ontario that the number could even be as high as 3.9 per cent and says the higher figure gets her worried.

« The bigger the number, the worse it’s going to be, so we’re just sort of [bracing] for the worst, » she told CBC News Saturday at the Norfolk County Fair in Simcoe, Ont. — one of the largest agricultural fairs in the province.

« We’re a sixth-generation dairy farm, and we’re probably not going to survive this, so I guess it just sucks to be us. »

Dairy farmer Vicki Cork speaks to CBC about the impact of the USMCA trade deal. 1:36

Foreign Affairs Minister Chrystia Freeland said Monday that farmers will receive compensation from the federal government, but details weren’t immediately available.

Cork claims that she hasn’t received any communication on what compensation may look like outside of a « pretty vague » email she got from the Dairy Farmers of Ontario.

« I look after the books for the farm, so I’m terrified, » she said. « Until they actually say something official, we really have no idea what the compensation will look like. »

Ontario’s Minister of Agriculture Ernie Hardeman told CBC News that consultations will be made with the province’s agriculture community to determine the cost associated with the new deal. He said he plans to ensure the federal government foots the bill.

Ontario’s Minister of Agriculture Ernie Hardeman says consultations will be made with the province’s agriculture community to determine the cost associated with the new deal. (Keith Burgess/CBC)

« It is quite obvious that opening up the market to the American market is going to hurt our producers, » he said at the Norfolk County Fair. « They made the deal, they should pay for the penalty that is caused by the deal. »

Some critics say the deal also erodes the supply management system, which puts quotas on the amount of milk farmers are allowed to produce. The quotos prevent overproduction that would otherwise hurt prices and farm incomes.

The system also put high tariffs on foreign producers trying to sell in the Canadian market, limiting foreign products on Canadian shelves.

Cork says Canada’s supply management system has been successful and the envy of countries around the world.

« The quota system was put in place because the government told us to manage our own system and we did and we were successful. We were too successful, » she added. « Other countries wanted into that. They wanted access to it, and our government sold us out. »

Cork says she has no animosity toward other dairy farmers or American dairy farmers, but rather the government.

The new USMCA deal would give U.S. farmers greater access to Canada’s dairy industry. (CBC)

« [Americans] envy our supply management and they want the government to help them implement supply management in the United States, » she said. « So why not help them do that instead of taking away from us because we had something successful? »

The deal would also eliminate Class 7, which essentially created a discounted price on Canadian-produced milk ingredients, so they could compete with similar products exported into Canada from the United States. The pricing system was introduced in March last year, which made the American equivalents uncompetitive.

Now with the new trade deal in motion, Cork is asking that Canadians specifically look for products that are made in Canada to help farmers at home.

« I would really hope that the general public would just really support your Canadian farmers, » she said. « You might pay a few cents more, but it was grown here. It was grown ethically and safely, and you’re supporting your neighbour. »


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Prime Minister pledges compensation for dairy farmers hit by USMCA deal


Prime Minister Justin Trudeau says dairy farmers will be compensated for their expected losses under the new United States-Mexico-Canada Agreement, making the pledge directly at a meeting with their representatives on Thursday.

Trudeau met privately with dairy representatives in downtown Montreal amid concerns in the industry that they’re bearing the brunt under the recently concluded free-trade pact.

Canadian dairy farmers stand to lose 3.59 per cent of their market to U.S. producers under the new trade deal, known as USMCA.

« That’s why we’re going to be working with them over the coming weeks and months to figure out exactly what is the compensation they need, » Trudeau said after touring the offices of Montreal company Seville Films.

« How we can ensure not just that they’re OK, but that they continue to have confidence in the future of the dairy sector in Canada. »

The USMCA is the third free-trade agreement in which Canada has agreed to open access to its supply-managed sectors, this time including increased access for eggs, chicken and turkey.

While touting USMCA as a good deal for Canadians by securing access to its largest trading partner and the largest market in the world, Trudeau acknowledged those sacrifices.

« They told me they were worried, » Trudeau said of his meeting with milk producers. « They told me they felt they have continued to give through a number of trade deals they’ve signed, and they’re right. »

For example, under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership — with 10 countries including Mexico, Japan and Australia — dairy farmers ceded 3.25 per cent of the market.

‘Producers are right to be dissatisfied’

Dairy Farmers of Canada president Pierre Lampron wasn’t satisfied with what he heard.

« We recognize the symbolism of the gesture of Prime Minister Trudeau in offering to meet with our industry to hear our concerns firsthand, » he said in a statement. « However, the absence of details on measures to mitigate the impact of the concessions made within the USMCA, as well as the absence of a vision for the future of our industry at this time, cannot appease the concerns of the dairy farmers. »

Raymond Bachand, Quebec’s chief free-trade negotiator during the recently concluded negotiations, said the number one objective for Quebec was to preserve access to the American market and that was done.

Watch Raymond Bachand, Quebec’s chief free-trade negotiator, weigh in on the USMCA

Sometimes people cheat, so you need arbitration,’ says Quebec’s chief NAFTA negotiator Raymond Bachand. 6:56

« However, Ottawa has sold a portion of the milk market and it is clear that it hurts when added to European (Comprehensive Economic and Trade Agreement) and the TPP deals, » Bachand said on the sidelines of a metallurgical conference.

« This is eight to 10 per cent of the market. Producers are right to be dissatisfied. But it’s not just compensation, but also strategic thinking to see how we make our businesses more competitive. »

Bachand said USMCA compensation would have to come quickly, noting compensation from the TPP deal took an extended period.

« If I tell you that you are going to lose some of your business, you do not want to wait five years to find out what you are going to have as compensation to be able to manage your finances and knowing where you are investing, » Bachand said.


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‘No other way’ says agriculture minister about USMCA supply management hit


If Canada wanted a trade deal with the United States it was going to have to compromise on supply management in the dairy industry, says federal Agriculture Minister Lawrence MacAulay.

As part of an agreement reached this week, Canada will allow American dairy farmers access to 3.59 per cent of the Canadian market.

This is the third trade deal where Canada has offered up supply-managed dairy markets as a bargaining chip. MacAulay told CBC News that given the rhetoric coming from U.S. President Donald Trump, Canada’s negotiators did very well.

« Without question, the U.S. government intent was to demolish the supply management system and that did not happen, » he said.

« We ended up coming from total destruction down to — there was talk of 20 per cent, then 10, then 6 — but we got 3.59 and I think it’s kind of important to thank our negotiators to be able to do that. It, of course, hurts. »

Compensation for dairy farmers

MacAulay said despite the now three agreements that traded away milk markets, more than 90 per cent of the market is still supply-managed.

Prime Minister Justin Trudeau has promised that dairy farmers will be compensated.

« The supply management sector took a hit and they will be compensated but there was no other way around it, » said MacAulay.

The deal is much better than what it could have been, says MacAulay. (Sean Kilpatrick/Canadian Press)

« If it could have been nothing that would have been great but that was not possible. »

The agreement is still not a done deal. The governments of the United States, Mexico, and Canada still need to approve it.

Should those approvals go through, the USMCA is expected to be in force in early 2019. Compensation is expected to be in place before the deal is enacted.

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With files from Angela Walker


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