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A coalition of international dairy organisations including the Dairy Companies Association of New Zealand (DCANZ) wants an end to Canada flooding world markets with subsidised milk.
The 10 dairy organisations from NZ, Australia, Argentina, the EU, Mexico and the US want the abolition of Canada’s recently implemented ‘Special Milk Class 7’ policies.
The coalition claims these policies are facilitating “the unfair export of highly subsidised Canadian dairy products onto global dairy markets,” while at the same time increasing Canada’s barriers to dairy imports.
“The impact of these policies on international markets is already being seen.
“Exports of low priced Canadian skim milk powder grew by 273% in the first four months of this year,” explains DCANZ executive director Kimberly Crewther.
The coalition has called on relevant trade ministers to pursue “all available avenues,” including WTO dispute settlement, to end Canada’s “new and harmful dairy policies”.
Canada implemented its special milk Class 7 pricing policies in February 2017 to artificially lower milk ingredient prices for Canadian dairy processors. These push Canada’s skim milk powder surpluses onto global dairy markets at low prices much below Canada’s cost of production.
“Canada’s new dairy policies fly in the face of its international trade commitments,” adds Crewther.
She says a WTO dispute case was successfully taken against Canada by New Zealand and the US in 1997.
This resulted in a restriction on Canadian export of dairy products while that country maintained its subsidising system of dairy supply management.
The international dairy coalition believes the new special milk Class 7 policies are an attempt by Canada to “circumvent previous WTO rulings”.
“Canada cannot be allowed to take a pick ‘n’ mix approach to international trade rules when the ultimate result is economic harm to dairy producers in other countries,” Crewther says.
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