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Canadians mull new trade pact, worry about domestic dairy industry

A dairy cow on a farm in Caledon, Canada. Cole Burston/Getty Images

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Dairy was one of the sticking points between the United States and Canada during the negotiations to replace the North American Free Trade Agreement.

American producers of milk and cheese complained Canada’s tightly controlled dairy industry limited their access to markets north of the border. The new agreement opens the door to more U.S. milk exports to Canada.

While it could lead to lower prices there, many Canadians worry about the fate of small milk and cheese producers, particularly in Quebec, home to half of Canadian dairy production. 

At the open-air Jean-Talon Market in Montreal, amid baskets of apples and stacks of local vegetables, Isabelle Croteau expressed her disappointment.

“There’s a risk of causing all these little Quebecois farms to fail, which are local producers that we should encourage,” she said of the agreement to admit more lower-cost American milk into Canada’s managed dairy marketplace.

Shopper Simon Miville-Deschenes said the health of the Quebec dairy industry is important and he is willing to pay the higher prices to support local producers.

However, he said, “I think that was a necessary concession that we made, and I’m happy that we did to get some of the other aspects of the deal that we were adamant in retaining.”

Canadian economists say it’s not clear yet what the new agreement will mean for dairy prices, but it’s probably bad news for small farmers, who will be required to produce less.

Cheesemaker Hugues Ouellet, at the market to visit a cheese shop that sells his products, expressed concern.

 “We’re attacked on all sides,” he said of Quebec’s dairy industry, with the NAFTA replacement as just another blow. Under recent trade pacts with Asian and European countries, Canada agreed to open its market to more of their dairy products.

Montreal cheese store owner Véronique Commend sources some of her products from local artisan Hugues Ouellet.

Véronique Commend, owner of the cheese shop Qui L’ait Cru, noted she hasn’t seen much impact from those other deals so far. The European cheese she carries isn’t that much cheaper than before Canada’s trade pact with the European Union. And she finds shoppers at her store in this unique market are still more interested in local varieties and willing to pay a premium for them.

Laura Ruggeri, originally from New York City but who’s lived in Montreal for nine years, was visiting the market with her mother.

Ruggeri said she and her Canadian husband had already shifted their buying habits in response to coverage of the threats to the dairy industry during NAFTA re-negotiations.

“Because of that, we have been buying more local dairy from small producers just to show our support for the local dairy industry here,” she said.

The NAFTA replacement is not yet final. The agreement requires action in Canada’s Parliament, Mexico’s Congress and the U.S. Congress before it can take effect.

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