Canada agreement eliminates Class 7 dairy, includes more market access
October 1, 2018
The agreement that the United States reached with Canada Sunday evening to include Canada in a new U.S.-Mexico-Canada trade agreement includes the elimination of Canada's Class 7 dairy program, and also increases market access for U.S. dairy products in Canada, Trump administration officials told reporters in a briefing late Sunday.
Class 7 covered the ultrafiltered milk that U.S. dairy producers had been exporting to Canada before Canada's adoption of the Class 7 grade of dairy products. Class 7 was the biggest irritant to U.S.-Canadian dairy relations.
Canada has also agreed to change policies that led it to export disproportionately, the officials indicated
The agreement also includes increased access to the Canadian dairy market that is better than what the Obama administration negotiated in the Trans Pacific Partnership agreement, a senior administration official said.
The dairy provisions were not included in exchange for any other specific provisions in the agreement, according to an official.
The agreement will be called the U.S.-Mexico-Canada Agreement (USMCA) and those terms will replace the North American Free Trade Agreement (NAFTA), an official said.
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The agreement, including the provisions with Mexico, are the "fulfillment" of one of President Donald Trump's most important goals and will constitute the template for other trade agreements that the administration hopes to sign.
The agreement does not include any changes to the tariffs that the United States has imposed on Canadian and Mexican steel and aluminum, an official said. That issue is proceeding on a separate track, with the Commerce Department in charge.
The officials said the trilateral agreement would be published today so that the three governments could sign the agreement by the end of November, when the current Mexican administration leaves office. But it will be up to the next Congress to approve the agreement, the officials said.
Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said in a joint statement, "Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement (USMCA)."
"USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region," the statement said. "It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.
"We look forward to further deepening our close economic ties when this new agreement enters into force," the statement said. "We would like to thank Mexican Economy Secretary Ildefonso Guajardo for his close collaboration over the past 13 months."