Can Canada uphold dairy supply management while giving U.S. more access?

News of a forthcoming trade deal between Canada and the U.S. this week has raised a key question: how exactly has Canada addressed the Americans’ issues with supply management , particularly concerning dairy ?

The U.S. has long complained that Canada severely limits access to its dairy market through supply management, which allows a certain amount of tariff-free exports under quotas. Exports that exceed those quotas face much higher tariffs.

U.S. President Donald Trump on Wednesday claimed that Canada had agreed to bring tariffs “down to zero” for American farmers, but didn’t offer specifics.

“The tariffs will be non-existent for our farmers. Our farmers were paying tremendous tariffs into Canada, and those tariffs are going to be totally eviscerated,” he told reporters.

Canada-U.S. Trade Minister Dominic LeBlanc, meanwhile, told reporters in Washington that the supply management system would remain in place but would not say if its terms would change under the deal.

“The prime minister was very clear: we needed to protect supply management, we needed to ensure that the supply management regime remained entirely intact, and I’m confident that that’s the case,” LeBlanc said.

Looming over the final negotiations is the threat of new 50 per cent tariffs on Canadian goods, which the White House has said are partly meant to offset “discrimination” against U.S. dairy commerce through supply management. Trump paused the tariffs, which were set to go into effect Wednesday, for three days as the trade talks entered their final stages.

But the U.S. dairy industry says its issue is not with supply management itself, but rather how — according to them — it’s been used to continue blocking American dairy products under the Canada-U.S.-Mexico Agreement on free trade (CUSMA).

“The U.S. dairy industry has never been after supply management,” Jamie Castaneda, executive vice-president of policy development and strategy at the U.S. National Milk Producers Federation, said in an interview.

CUSMA increased U.S. access to Canada’s dairy market by allowing a set number of tariff-rate quotas to American exporters to sell their products into Canada duty-free. The Dairy Processors Association of Canada says the system means the U.S. has had access to nearly four per cent of the Canadian market.

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