Dairy protected 'for good reason,' Trudeau says; Trump calls Canada's actions a 'disgrace'

Prime Minister Justin Trudeauhas metU.S. President Donald Trump's pointed criticism of Canada's dairy industrywith calmcounterarguments in defence of how Canada prefersto manage its milk.

"Let's not pretend that we're in a global free market when it comes to agriculture," he told BloombergNewseditor in chief John Micklethwaitduring a question and answer session in Toronto Thursday.

"Every country protects for good reason its agricultural industries. We have a supply management system that works very well here in Canada. The Americans and other countries choose to subsidize to the tunes of hundreds of millions of dollars, if not billions of dollars, their agriculture industries, including their dairy," the prime minister said.

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"Different countries have different approaches, and we're going to engage in a thoughtful, fact-based conversation on how to move forward in a way that both protects our consumers and our agricultural producers," he said.

Trudeau's comments were, in the words of his interviewer, hisfirst chance to react to the"constructive dialogue" started by Trump Tuesday, when he used a speech in Wisconsin to attack the unfairness of recent pricing changes for dairy ingredients in Canada that make American imports less competitive.

Donald Trump slams Canada-U.S trade deals

7 years ago

Duration 1:24

U.S. president calls Canada's dairy trade 'a disgrace' and 'a disaster'

The "terrible" plight of American dairy farmers has captured the attention of U.S. politicians of all stripes as the U.S. sector grapples with the twin difficulties of overproduction andlow global prices for milk.

"How certain governors are speaking to certain constituencies on that, it's politics," Trudeausaid. "At the same time, the U.S. has a $400-million dairy surplus with Canada. So it's not Canada that is the challenge here."

Broadens attack to include lumber

Trump's jabs atCanada continued Thursday as the media was invited to watch him sign another memorandum on trade in the Oval Office.

"I wasn't going to do this," he told reporters as he changedtopics away from the foreign steel investigation he was meant to be discussing.

"Canada ...what they've done to our dairy farm workers is a disgrace. It'sa disgrace," he said. "Rules, regulations, different things have changed, and our farmers in Wisconsin and New York state are being put out of business."

But Trump didn't stop there, also raising "what's happening along our northern border states with Canada, having to do with lumber and timber."

The U.S. president's remarks come ahead of a U.S. Department of Commerce decision expected early next week on levying countervailing duties against Canadian softwood lumber imports.

Last week, a NAFTAreview panel ruled mostly against the U.S. ina separate case overduties against Canadian mills producing glossy paper for things like magazines and catalogues.

"NAFTA, whether it's Mexico or Canada, is a disaster for our country. It's a disaster. It's a trading disaster," he said, saying his office would be "reporting back sometime over the next two weeks" on what it's going to do about the North American Free Trade Agreement.

At Issue: Trump calls Canada a 'disgrace'

7 years ago

Duration 12:36

The panel discusses the U.S. president's accusations that Canada is not playing fair when it comes to agricultural products.

Trump continues to promise his supporters that he will renegotiate a better deal.

"We can't let Canada or anybody else take advantage and do what they did to our workers and to our farmers," he said.

Canada more open than U.S.: Freeland

In fact, the two issues Trump raised Thursday Canada's supply management system for dairy production and the longstanding debate over the way Canada manages its softwood lumber supply were not part of the original NAFTA.

It's unclear whether they will be included in the scope of the renegotiations.

Talks won't begin until after a mandatory 90-day consultation period with the U.S. Congress.

Trump's nominee for the cabinet position of trade representative has not yet been confirmed.

"Every day is a new and interesting day," Foreign Affairs Minister Chrystia Freeland said when asked about the Canada-U.S. relationship at an event in Toronto.

But she said she still feels confidentabout the relationship they've been developing, noting there have been more than 180 meetings between players in the Trump administration and Canadian officials since the new U.S. government took office in January.

"Our dairy market is in fact more open to imports than the U.S. market is," the ministersaid. "On dairy ... we are fully compliant with all our NAFTA and WTO commitments.

"It's the job of politicians to respond to the unhappiness of some of their constituents, but on dairy we are very comfortable with our position and I think that trade lawyers will agree with us."

• U.S. government to release decision on Canadian softwood lumber April 25