Sacred Canadian Dairy Cows Roam Fringes of Trump’s NAFTA Fight

Just before midnight one spring evening, Canada’s envoy in Washington got a call from Commerce Secretary Wilbur Ross.

Farmers in U.S. House Speaker Paul Ryan’s home state were up in arms over Canada’s rules and had gotten President Donald Trump’s ear. Ross was looking to David MacNaughton for help.

“He said, ‘the President’s in Wisconsin — I’ve never heard him so upset,’” MacNaughton later recalled in a speech in Ottawa. According to MacNaughton’s account, Ross continued: “There are a bunch of dairy farmers that are going bankrupt and it’s all because of Canada. What are you going to do about it?”

Despite that bluster, negotiators hashing out a revamp of the North American Free Trade Agreement in Ottawa this week still haven’t received U.S. proposals on the most contentious issues, including dairy, which was left out of the current NAFTA but has been a lightning rod in all recent Canadian trade talks. It’s expected to end up on the table again, with the Canadian government pledging to dig in.

“We intend to defend supply management and the interests of Canadians in these negotiations,” Prime Minister Justin Trudeau said Monday at press conference in Toronto.

Presidential Threats

Agriculture is on the agenda Tuesday and Wednesday in the third round of talks between Canada, the U.S. and Mexico. The trio of ministers arrive to join talks Tuesday. When and where dairy comes up will be a key test of the link between Trump’s words and the actions of his negotiators. Emily Davis, a spokeswoman for U.S. Trade Representative Robert Lighthizer, declined to comment when asked if the U.S. will press for dairy reform in NAFTA talks.

“There’s less pressure on that than was expected,” according to Quebec Premier Philippe Couillard, whose province is home to the most dairy farms in Canada. That may be because the U.S. doesn’t want to open up its own system of subsidies, he said last week in an interview at Bloomberg’s headquarters in New York.

“When you start putting something on the table, you have to be sure that the end result is exactly what you wish for,” Couillard said, adding he doesn’t take Trump’s public threats as gospel since in his view they are “mainly designed for the internal U.S. political environment.”

Industry, too, is in a holding pattern pending specifics from U.S. negotiators. “We haven’t really heard what he wants from the Canadian market,” Pierre Lampron, head of the…

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