A dispute settlement panel organized under the revised North American free trade agreement made public a ruling on January 4 concerning the dairy sector. The U.S. had complained that Canada was not abiding by the terms of the agreement to open up its dairy market to U.S. imports. The three-member panel agreed with the U.S. side and ruled that Canada was violating its commitment under the agreement to allow more U.S. dairy commodities into the Canadian market. The revised free trade agreement grants U.S. dairy producers more duty-free or lower tariff access into Canada for their dairy products including milk, cream, cheese, yogurt and ice cream. “We prevailed — as we thought we would,” the CBC quotes a senior official in the U.S. Trade Representative’s office.

This assault on Canada’s dairy industry is on behalf of the oligarchs who dominate the U.S. dairy sector and seek to take over Canada’s as well.[1]

Following the release of the ruling, the CBC carried an article called “U.S. defeats Canada in first dispute under new North American trade pact.” The article reads in part, “Canada has lost its first dispute case under the new North American trade agreement to the United States. A panel found that Ottawa flouted part of its obligation to open the dairy market. Now the U.S. says Canada could face tariffs if it doesn’t fix the problem.”

Reuters carried a similar article titled, “Canada loses to U.S. in trade spat as panel says dairy rules defy pact.” It reads, “Canada violated a trade accord with the United States and Mexico by reserving most of its preferential dairy tariff-rate quotas for Canadian processors, a dispute panel found, and Washington warned it could retaliate if Ottawa does not change course. U.S. Trade Representative Katherine Tai said the ‘historic win will eliminate unjustified trade restrictions on American dairy products, and will ensure that the U.S. dairy industry and its workers get the full benefit of the USMCA to market and sell U.S. products to Canadian consumers.’

“U.S. producers exported $478 million of dairy products to Canada from January through October (2021), according to U.S. data. It was not immediately clear how much the volume could increase as a result of the panel’s finding.”

The free trade agreement and ruling continue the process of integrating Canada’s economy into the U.S. economy for the benefit of the global oligarchy. The dairy industry is one of the last vestiges of what could be termed a Canadian economy under the control of Canadians for the benefit of both Canadian producers and consumers. The changes signal the loss of Canadian control and a further victory for the global oligarchs who are determined to operate without regulations, rules or any semblance of national sovereignty that favour the people.

Another Nail in the Coffin of Canada’s Dairy Industry

Global Affairs Canada in a statement issued on behalf of Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development, and Marie-Claude Bibeau, Minister of Agriculture and Agri-Food, welcomed the ruling, saying the dispute was resolved in favour of Canada and that Canada would abide by the findings.

Incongruous as it may seem, the statement appears to present the ruling as a “win” for Canada and not a further nail in the coffin of supply management and the rights of Canadians to control their own economic affairs.

The statement starts off by saying, “We are pleased with the dispute settlement panel’s report, which ruled overwhelmingly in favour of Canada and its dairy industry.”

These words appear odd but upon reflection the statement applauds the general thrust of free trade agreements that allow the global oligarchs to control all economic activity within an economy integrated into that of the United States which operates without any sovereign regulations that may restrict their operations in favour of the people. In that sense the ruling is a victory for the oligarchs who in fact control the Canadian government and the major producers in the dairy industry. It does not favour small producers who will be further decimated as a result of increased U.S. access to the Canadian market.

The government statement following the ruling included this “Quick fact”: “Canada’s dairy industry is a vital pillar of rural communities and a key driver of Canada’s economy. There are 10,095 dairy farms in Canada, which directly support approximately 19,000 jobs. The demand for Canadian dairy products remains strong. This demand has led to a 10 per cent increase in raw milk production in the last five years.”

It should be noted that Canada’s population has increased by a similar percentage during the last ten years and, furthermore, the pertinent facts would be how much milk and cheese is required by Canadians and how much of it is supplied by Canadian producers.

The government statement reiterates its submission to the global oligarchy saying, “Canada takes its commitments and obligations under international agreements seriously. These include those that Canada has under CUSMA with the United States, Canada’s closest trading partner.”

An economy under the control of the people that meets their needs and claims would necessarily mean sovereign political control that restricts the activities of the global oligarchs where their activity violates the rights and needs of Canadians. A sovereign economy in Canada would not be organized to serve the most powerful oligarchs but would be self-reliant and have the aim to guarantee the needs and rights of all and engage in international trade for mutual benefit and development.

Note

1. The three member dispute settlement panel is composed of a Uruguayan diplomat who was once ambassador to Canada, a Canadian trade lawyer based in the U.S., and a U.S. trade lawyer named to the panel by Canada.