US To Sue Canada Over Dairy Practices As Hopes For Better Trade Fade | International exchange

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After four tumultuous years living next to Donald Trump, many Canadians had hoped that relations with their closest neighbor would be reestablished under Joe Biden. The former president slapped the tariffs on Canadian steel and aluminum, threatened with levies on the auto sector and called Prime Minister Justin Trudeau “double-sided.”

But in recent weeks, Canadian officials have faced growing tensions with the United States under Biden as leaders on both sides face domestic political challenges.

On Tuesday, U.S. Trade Representative Katherine Tai announced plans to sue Canada for its controversial dairy practices, accusing the country of violating the U.S.-Mexico-Canada agreement, the free trade pact set up to date of the continent.

For years, Canada strictly controlled the production of milk, butter and cheese through supply management – a complex system of production controls and tariffs designed to keep domestic prices stable. Imported products – like American cheese – are hit with a 300% levy.

Although Canada has announced its intention to allow more imports without high tariffs, Tai alleged that Canada still uses its complex licensing and tariff system to favor Canadian producers over the products of Canadian producers. other countries.

Canada’s Trade Minister Mary Ng said in a statement she was “disappointed” with the move and that her government would “protect and defend” the practice of supply management. Many of the farmers benefiting from the program are in the province of Quebec, a key electoral battleground.

Trudeau played down the strain on dairy, saying there will “always be issues that Canada and the United States disagree on.”

The disagreements include an announcement last week by the US Department of Commerce to double tariffs on lumber, the latest move in a feud that has persisted for nearly four decades. Canada has also become frustrated that Biden has not publicly supported Canada in a dispute with Michigan over Line 5, an oil and natural gas pipeline that Ottawa says is critical to its economy and its operations. energy needs.

“Canada is somewhat at a disadvantage when it comes to trade relations with the United States. It’s close and it’s more domestic. We don’t feel that we are dealing with China and we should be careful, ”said Christopher Sands, director of the Canadian Institute at the Wilson Center in Washington. “With Canada, there is this perception that we can face them, we are not afraid of them.

Dairy and timber are issues that Canadian officials might have hoped could be negotiated more favorably under Biden.

But a tightly divided Congress and looming midterm elections mean Biden and the Democratic Party feel immense political pressure to be strong on trade, Sands said – meaning there is little appetite for them. trade concessions. “No one on Capitol Hill wants to run in the next election saying they let Canadians get away with it,” he said.

The timing for Trudeau was also poor.

Hoping to convert his parliamentary minority into a majority, the prime minister is now tasked with handling a number of issues in the country’s main electoral regions.

“Ottawa was probably hoping that it could gain more time on all of these disputes, maybe even after the fall election,” Sands said. “This does not seem to be the case.”



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