Dairy Farmers of Canada pans new trade pact with U.S., Mexico

Canadian dairy farmers are panning the renegotiated trade pact between Canada, the U.S. and Mexico, saying the deal will undercut the industry by limiting exports and opening up the market to more American products.

Dairy Farmers of Canada issued a terse statement soon after the agreement was announced late Sunday, following 14 months of difficult negotiations between the parties.

The organization says the newly minted U.S.-Mexico-Canada Trade Agreement, or USMCA, will grant greater market access to the domestic dairy market and eliminate competitive dairy classes, which the group says will shrink the Canadian industry.

The lobby group says the measures will have "a dramatic impact not only for dairy farmers but for the whole sector," adding that it fails "to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood."

Details on the deal remained sparse, but U.S. administration officials say it provides increased access to Canada's dairy market for U.S. producers and limits the American impact of Canada's controversial supply management system for dairy and poultry products.

Prime Minister Justin Trudeau would only say it was a "good day for Canada" as he left a late-night cabinet meeting in Ottawa that capped several days of frenetic long-distance talks that included Foreign Affairs Minister Chrystia Freeland and U.S. Ambassador David MacNaughton.

U.S President Donald Trump praised the deal, saying in a tweet this morning that negotiators had crafted a "wonderful new trade deal with Canada," that "solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our farmers and manufacturers, reduce trade barriers to the U.S. and will bring all three great nations closer together."

The deal appears to preserve the key dispute-resolution provisions--Chapter 19--which allow for independent panels to resolve disputes involving companies and governments, as well as Chapter 20, the government-to-government dispute settlement mechanism.

A side letter published along with the main text of the agreement exempts a percentage of eligible auto exports from the tariffs. A similar agreement between Mexico and the U.S. preserves duty-free access to the U.S. market for vehicles that comply with the agreement's rules of origin.