Yesterday was that day, as Donald Trump held a new conference to directly name Canada, as a country that is both unfair and disgraceful regarding our supposed treatment of dairy farmers in Wisconsin. Personally, I am a Green Bay fan, but to hear that farmers in Wisconsin are using Canada as an argument for their woes, is something disgusting in an of itself.
Trump did not stop there though, he went even further to name our energy sector, our lumber and NAFTA in general as being a bad deal, disgraceful and unfair for Americans. Later on in the evening, Trump met with Italian Prime Minister Paolo Gentilloni, where he further mentioned the importance of a RECIPROCAL relationship, he even went to the trouble of repeating the word and stressing it.
For many, people do not realize that Canada, currently has a trade deficit with America in the dairy sector. We utilize supply management, which is essentially a system in place that provides a guaranteed income for producers. The Americans on the other hand provide a lot of money to subsidize their dairy sector and as such have found themselves in the current predicament.
If farmers in Wisconsin are currently suffering, it has nothing to do with Canadians, but rather because they have the issue of over production. The American way of business is to squeeze as much profit from their business as possible (Think Walmart), which in the case of the dairy farmers, has left them with a lot of milk and nowhere immediately to sell it.
Back to that trade deficit with America, Canada currently has a deficit with them to the tune of around $500 million. If anything, we receive almost 5 times more American dairy products than they do Canadian. The current issue is where our government is stepping in to halt the flooding of our market with even more American milk. Which is important, because their job is too protect Canadian interests.
Quality vs. QuantityAnother side issue to this, is that American milk is not subject to as much regulation as Canadian milk products. So, as such, many producers increase their output by using medicines and processes that may alter the milk. For example; Higher traces of puss and antibiotics have been found in American milk, which many argue is not only disgusting, but potentially hazardous to humans after long term consumption. Not to mention the issue with powdered milk products being incorporated into cheese and other dairy items.
If you call something dairy, it should at least be made with some part natural milk and not bi-products in my opinion.
NAFTAIt doesn't take much to see beyond the act that Donald Trump is using to over dramatize this issue and NAFTA overall. He will use this as a power play in order to strong arm Justin Trudeau into a better NAFTA deal, if one can even exist.
Trump wants to tear up NAFTA, because he believes that his own negotiations can intimidate both allies and enemies into bowing to his demands. What he does not understand is that by doing so, he also risks establishing a worse deal and also alienating America.
While Trump was bashing Canada, Trudeau was involved in an interview with Bloomberg business, where went out of his way to kiss Trumps ass. Trudeau believes that Trump can be swayed with facts and discussion. I agree that this is the right approach with Trump, but we will have our first chance to see how successful this actually is in two weeks, when Trump's administration releases their NAFTA papers.
What needs to be continually established however, is that Canada is a sovereign country that looks after its own, while working together with other countries regarding common interests. To bend over and allow more American dairy just because they make too much, is not an acceptable and healthy excuse for trade.
Until Next Time!