Nfld. & Labrador

N.L. dairy industry feels let down by new trade deal

Prime Minister Justin Trudeau may call the new trade agreement a good deal for Canada, but it's a bad deal for the dairy industry, says one N.L. producer.

Dairy producer says concessions in so-called NAFTA 2.0 are bad down on the farm

A dairy cow at a Canadian farm in August. (Ryan Remiorz/Canadian Press)

Loss of access to their market in the new North American free trade deal is "a real kick in the gut," for the Canadian industry, says a dairy producer in Lethbridge, N.L.

"We were sort of told that there would be no negative impact or bad deal for Canada, but it's a bad deal for us," says Jeff Peddle.

Peddle is a board member of the Dairy Farmers of Newfoundland and Labrador. The industry group released a statement Wednesday saying it's monitoring the impact of the new trade deal on local producers.

"While the implications of these changes for Newfoundland and Labrador are not yet fully known, the importance of the supply management system to this province's food security is broadly recognized," says the statement.

"The impact on the livelihoods of our dairy farm families, their employees, their processing partners and the rural economies of the communities they reside in remains uncertain."

Three deals with dairy concessions: Peddle

In the new U.S.-Mexico-Canada trade agreement, dairy farmers lost 3.6 per cent of their market to the other two countries, new export controls were put in place and a dairy class that helped Canadian processors compete without using American imports was eliminated.

The particulars of the trade deal are still being reviewed, Peddle said, but it's hard not to feel that dairy has been treated as a bargaining chip.

"This is three deals in a row now where dairy, we've had to give up access to our market."

In Canada's last three international trade deals — CETA with Europe, the CPTPP with Asia-Pacific countries and now USMCA — the dairy market has been made increasingly accessible to international trade. (Radio-Canada)

Those deals work out to the equivalent of losing roughly 10 per cent of their market, Peddle said. Export caps have been placed on Canadian dairy as well.

"We're letting access in, but we're getting restricted on what we can ship out."

The USMCA deal also eliminates a class of milk designed to use the oversupply of skim milk, the dairy association said.

Class 7 was created to help market milk ingredients, Peddle said, because increasingly people are eating dairy rather than drinking it.

Losing that class is another potential market cut off, he said.

Quality concerns

Peddle also worries about the quality of the dairy that will be entering Canada under the deal.

"Right now the Canadian milk quality standards are second to none," he said.

It's unclear right now if the product coming into the country would be required to meet those higher standards under the new trade deal.

Peddle says he's been let down by the federal government

"We've lost a part of our market," he said. "We have no way to recoup that loss."

The federal government has said it will compensate dairy farmers for the impact of the new deal, but no details of what that package will look like have been released.

With files from The Corner Brook Morning Show

Read more articles from CBC Newfoundland and Labrador