Jaime Castaneda, senior vice-president with the National Milk Producers Federation in the United States, said American dairy producers had tolerated the existence of supply management, but Canada went too far when it a created a new class of milk.
Until now, most of the talk has been about getting rid of this new low-priced class for Canadian milk sales.
Now the U.S. industry has formed an alliance with Mexico and their goal is elimination of Canadian supply management.
The issue of low-priced milk arose after importers learned they could escape protective tariffs by importing a new product not listed in the tariff schedule – diafiltered milk.
Canadian processors began importing a trickle of the diafiltered milk, then it became dozens of tanker truckloads that the milk marketing boards say was taking a $200 million-a-year bite out of their market.
When they persuaded the processors to stop importing in return for the offer or lower prices for Canadian-produced milk, it angered U.S dairy farmers who caught the attention of President Donald Trump when he was in Wisconsin.
He promised to help them.
While news media attention if focused on the NAFTA negotiations in Ottawa, there is another serious threat to the new milk pricing system if and when the World Trade Organization agrees to delve into a complaint from the United States.
The World Trade Organization has already ruled that Canada can’t export dairy products made from lower-priced milk because it amounts to cross-subsidization, and export subsidies are not allowed.