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April 19, 2017

Could WTO Action Against Canada Be Eminent?

 |  By: Anna-Lisa Laca

Following a new trade policy that makes it more affordable for Canadian processors to purchase domestic milk than imported milk, countries around the world aren’t happy. So much so, several countries have expressed the possibility that they would support World Trade Organization (WTO) action against Canada.

Earlier this month former secretary of agriculture and CEO of the U.S. Dairy Export Council, Tom Vilsack, said WTO action is a possibility if Canada doesn’t reverse the “protectionist policy.”

“If push comes to shove, we will be looking at a longer term strategy with the WTO,” he said. “Candidly, we don’t want to go through the WTO process because it takes a lot of time.”

Following President Trump’s comments yesterday calling the new policy unfair, leaders in Australia, New Zealand, the European Union and Mexico voiced their support for WTO action.

“I don’t expect there would be many countries that would do anything other than support a WTO action against Canada,” said Australian Dairy Farmers interim Chief Executive Officer John McQueen according to Reuters.

The Associated Press (AP) reports that Canadian Ambassador David MacNaughton doesn’t agree the policy is unfair and said in a letter to the governors of Wisconsin and New York that Canada is aware of their letter to Trump asking him to address Canadian dairy practices.

"Canada does not accept the contention that Canada's dairy policies are the cause of financial loss for dairy farmers in the United States," MacNaughton told the AP.

Meanwhile, Reuters also reports Dairy Companies Association of New Zealand is working with the New Zealand Foreign Ministry to gather information for a WTO complaint.

“When you close a market like this one has been closed, there’s significant consequence,” Vilsack said. “It’s a serious situation.”