As the second round of NAFTA modernization talks begin today, the U.S. and Mexican dairy industries are united on a set of nine common priorities. They include a renegotiated NAFTA that puts an end to Canada's Class 7 milk pricing scheme.
Dairy leaders from the United States and Mexico issued a joint statement on their priorities after a second annual summit of the August 24 United States-Mexico Dairy Alliance, in Guadalajara, Mexico.
The two dairy industries want government officials gathered in Mexico City today through Tuesday to consider their common concerns as they attempt to hammer out terms of a new North American Free Trade Agreement (NAFTA).
U.S. Dairy Export Council CEO and President Tom Vilsack attended the meeting in Guadalajara last week and was encouraged by a spirit of growing collaboration and partnership with Mexico's dairy industry.
"We want to strengthen our relationship as Mexico’s most trusted dairy trading partner so we can continue to work together for the benefit of dairy sectors on both sides of the border,” said Vilsack. “That goal is all the more essential given other nations’ efforts to pursue harmful and disruptive approaches to dairy trade with Mexico through practices that hurt Mexican and U.S. dairy farmers and workers in the process.”
In February, Canada implemented a special milk Class 7 pricing policy that artificially lowers milk ingredient prices for Canadian processors and is designed to push excess Canadian proteins out onto world markets at below-market prices, while at the same time incentivizing the substitution of domestic Canadian dairy ingredients for imported ingredients.
The result of this policy was the widely reported cancellation of purchases by Canadian cheese makers of U.S.-sourced ultra-filtered (UF) milk in the first quarter of this year, and the even more damaging ability of Canadian exporters to sell milk proteins globally at a much lower price, thereby undercutting exports from the U.S. and the other countries. It is due to this latter impact that dairy groups in multiple countries have been expressing opposition to Canada’s new system.