August 16, 2018

U.S., Mexico Trade Deal Won’t Do Much For Dairy

 |  By: Mike Opperman

A trade deal between the U.S. and Mexico is close to completion. Negotiators from both countries are in the fourth straight week of negotiations, and final trade-offs are lined up to reach a deal, according to Politico.

While any news of a trade deal is good news for farmers, a trade deal between Mexico and the U.S. may not mean much to U.S. dairy producers. That is, not until Canada gets involved.

“Dairy will be handled when Canada comes back to the talks,” says Jim Wiesemeyer, Pro Farmer Washington policy analyst. “It will likely be a last minute discussion. Canada will likely come close to what they offered the U.S. via TPP.”

Through the TPP (Trans Pacific Partnership) Canada allows 3.25% market access to the Canadian dairy market for Japan, Mexico and the other eight trading partners that are part of the deal. In original negotiations around the North American Free Trade Agreement (NAFTA) the U.S. was asking for 10% access. Canada has denied access at that level.  

In recent weeks the U.S. has pursued a bilateral agreement with Mexico in hopes that doing so would entice Canada to come to the negotiating table. President Trump threatened tariffs on Canadian-made cars if they didn’t come to an agreement on NAFTA, according to Wiesemeyer.