FIRST READING: Why the world hates Canada for its dairy policy – National Post

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Two countries are separately embroiled in fights with Ottawa over its protectionist dairy policy, illustrating the steep diplomatic price that Canada pays in order to shield its milk producers from the free market.

Last week, New Zealand initiated a dispute process alleging that Canada has violated the terms of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPATPP) through its tight controls on dairy imports. Its the first time such proceedings have been initiated between signatories of the 2018 trade agreement.

In a statement, New Zealands Minister of Agriculture Damien OConnor wrote that while Canada had signed the agreement with a promise to approve a regular quota of imported New Zealand dairy, Ottawa was simply refusing to grant the quotas.

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The value to NewZealand of this lost market access is estimated to be approximately $68 million over the first two years, OConnor wrote, adding that he still saw Canada as a good friend.

The United States just finished winning a similar dispute launched against Canada for much the same reason. Canada signed the United States-Mexico-Canada Agreement with a promise to let in increased quantities of American milk and cheese, and then simply denied import quotas to American producers.

That, too, represented the first time in the agreements history that a dispute had been launched between signatories.

Although Canadian Trade Minister Mary Ng recently announced a revamp of the rules surrounding who is allowed to import duty-free American dairy, U.S. dairy producers are already accusing Canada of once-again skirting its trade commitments and blocking American cheese at the border.

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When it comes to non-dairy commodities, Canada is an enthusiastic proponent of free trade. Global Affairs Canada boasts that the country has 15 free trade agreements with a cumulative 49 countries.

But negotiations for almost all of those agreements have gotten hung up on the fact that while Canada wants tariff-free markets for its beef, lumber and wheat, it simultaneously wants to impose prohibitive tariffs on foreign milk and cheese.

Then-U.S. president Donald Trump repeatedly cited Canadian dairy controls as one of his reasons for re-negotiating NAFTA, calling supply management a disgrace.

Canadian dairy policy was also a sticking point during the negotiations that ultimately yielded the CPATPP. Ottawa was ultimately forced to make some concessions on dairy imports, for which it pledged to pay out more than $4.3 billion in federal dollars to the Canadian dairy sector.

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Canadian supply management has been particularly galling for New Zealand, which counts the dairy sector as its single largest source of exports. Whats more, New Zealand only became a dairy powerhouse after dismantling its own protectionist policies, which looked remarkable similar to Canadian supply management.

Our industry has become more efficient and larger, New Zealand Trade Minister David Parker told Global News in a 2018 interview urging Canadian to ditch protectionist dairy policies. Rather than being adverse to (the dairy sectors) interests, its turned out the opposite way, he added.

Supply management was first established in the 1970s, and uses a combination of production quotes and strict border controls to ensure an artificially high price for Canadian milk, cheese and eggs. Research out of the University of Manitoba has estimated that the system imposes an annual per-family cost of between $339 and $554 per year.

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But with the system supported by one of the strongest lobbies in the country, supply management enjoys near-universal support among federal legislators, including explicit endorsement by all five parties in the House of Commons.

While centralized economic policy is typically something that the Conservative Party would oppose (such as in their dismantling of the Canadian Wheat Board), supply management is openly endorsed by four out of the six candidates for the partys leadership including the races two frontrunners, Pierre Poilievre and Jean Charest.

IN OTHER NEWS

Abacus Data has a new poll of federal voter intentions and its basically the same as its been ever since the 2021 election. The Conservatives are in first place with 33 per cent, the Liberals in 31 per cent and the NDP in a distant third with 19 per cent. This means that if an election was held tomorrow, it would turn out roughly the same as the last two: A Liberal minority supported by the NDP, and Conservatives in opposition. While the Conservatives consistently capture a plurality of the popular vote, much of this is concentrated in intensely Conservative ridings in B.C., Alberta and Saskatchewan meaning that the Liberals can capture more seats despite a lower number of raw votes.

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July 1 will mark the first time in three years that Ottawa will host an in-person Canada Day celebration, but the festivities will not be taking place on Parliament Hill. Lest you think its actually because of fears over a revamped Freedom Convoy demonstration, however, Heritage Canada said its because of ongoing renovations to the Centre Block of Parliament. Instead, the Canada main stage will be constructed at LeBreton Flats, a park just to the west of the citys downtown notable for containing the Canadian War Museum.

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FIRST READING: Why the world hates Canada for its dairy policy - National Post