Canadian Dairy Farmers Criticize New Trade Pact with U.S.

Canadian dairy farmers have castigated Prime Minister Justin Trudeau's government for yielding to U.S. demands for greater access to Canada's protected milk and cheese market as part of a new continental trade pact, but auto workers were pleased.

The dairy concessions were made in the final hours of year-long negotiations to replace the North American Free Trade Agreement, which had been stuck on U.S. President Donald Trump's insistence that Canada open its dairy market to U.S. competition.

The Dairy Farmers of Canada denounced the U.S.-Mexico-Canada agreement, warning that the concessions, which give U.S. farmers an additional 3.59 percent slice of the Canadian dairy market, "will have a dramatic impact not only for dairy farmers but for the whole sector."

"This has happened, despite assurances that our government would not sign a bad deal for Canadians," it said. "We fail to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood."

Preserving the protections for dairy was politically important to Trudeau, whose Liberal party faces elections next year.

Milk-and-cheese-producing Quebec holds provincial elections on Monday that are seen as an early barometer of national support for the ruling Liberals.

But Trump had threatened to leave Canada out of the trade deal altogether if an agreement could not be reached by midnight Sunday, confronting Trudeau with the prospect of broader disruptions to the Canadian economy.

- Auto workers happy -

Jerry Dias, head of Canada's largest union representing auto workers, said he was "absolutely thrilled" that a deal was reached keeping the door open for the nation's top export.

"The number one export industry in the country is the auto industry," he said, adding that Trump's threat to impose 25 percent tariffs on Canadian automobiles and parts was also off the table.

He also praised keeping dispute resolution panels, an exemption for Canadian cultural industries which "prevent the United States from taking control of the media sector in Canada."

A two-year extension on some drug patents to 10 years will cost Canadians more, but Dias said Ottawa is planning to introduce a nationwide pharmacare plan next year that would mitigate any direct cost increases to Canadians.

Quebec's former premier Jean Charest defended the new United States-Mexico-Canada Agreement (USMCA) as "a good deal for Canada on balance."

"Opening part of the market and allowing more products in while preserving supply management" was largely expected, he told public broadcaster CBC, adding that similar dairy market access was granted in recent free trade agreements with Europe and in the Trans-Pacific Partnership.

Canada's supply-managed system controls the production and price of milk and poultry and ensures stable incomes for Canadian farmers. The Canadian sector is worth Can$20 billion (US$16 billion).

- Trump's 'gun sights' -

"Dairy farmers are not happy but when Trump made that his key 'ask' over and over and over again, I don't think it could be ignored," said Jon Johnson of the CD Howe Institute, who helped negotiate the original 1994 NAFTA.

"It is not win-win-win but it is a survival thing," Johnson told CBC. "We got a deal that I think most Canadians can live with. No deal is perfect."

He added that Trump "can now go off and deal with China and deal with other people he wants to have trade wars with, and we are out of his gun sights for the time being."

"That's really a lot better than the alternative," he said.