As part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Canada agreed to provide 10 Trans-Pacific countries with an additional 3.25% of access to its domestic dairy market. This access comprises a wide-range of dairy categories ranging from fluid milk to cheese to yogurt.
How will this impact dairy processors?
DPAC estimates that, at full implementation, CPTPP market access will result in more than $100 million losses per year for Canada’s dairy processors. According to Global Affairs Canada’s (GAC) own estimates, dairy imports associated with CPTPP will increase by 13% while exports will increase by a mere 0.5%. This federal government analysis confirms that CPTPP will not benefit Canada’s dairy sector.
Dairy processors have invested over $7.5 billion in capital investments and research and development to strengthen and grow Canada’s domestic dairy market over the last decade. However, in just the past two years, the access that Canada has granted access to trading partners through CPTPP, CETA, and now the United States-Mexico-Canada Agreement (USMCA, formerly NAFTA) represents a combined loss 300$ million annually at full implementation. Theses losses do not reflect the additional concessions made with regard to domestic dairy policies in CUSMA, which promise to be equally or even more harmful.
Government listened to DPAC’s call
DPAC welcomed the government’s announcement that dairy processors would receive the vast majority of CPTPP dairy import licenses, known as Tariff Rate Quota (TRQ). Government listened to DPAC and its dairy sector partners and acknowledged that these TRQ will allow not only the dairy processing industry to recoup a return on past investments, but it will also encourage future investments in the Canadian dairy sector, all while helping Canada fulfill its trade obligations. DPAC calls on the government to abide by its initial decision during the current TRQ allocation review.
Want to know more about CPTPP and its impact on dairy?
As the government makes a decision on CPTPP compensation, it needs to remember that Canadian dairy families are worth fighting for.