Canada's Trudeau Defends Dairy System After Trump Criticism

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Canada's Trudeau Defends Dairy System After Trump Criticism

Canadian Prime Minister Justin Trudeau speaks to the media during a visit to the Manhattan borough of NY, U.S., April 6, 2017.

Canada is not a problem for the US when it comes to the dairy market and the country's Prime Minister, Justin Trudeau, says it will keep its system of protectionist dairy quotas, Bloomberg reports.

In an interview with Bloomberg News, Trudeau said there has been a dearth of data on what has been driving soaring real estate prices in markets such as Vancouver and Toronto, where concerns about a possible bubble have mounted.

Trump was echoing and amplifying the complaints of Wisconsin and NY governors, who say Canada's decision to create a new lower-priced, classification of milk product has frozen US producers out of the Canadian market.

"Canada, what they've done to our dairy farm workers, is a disgrace".

Trudeau's comments were, in the words of his interviewer, his first 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. He stood by his own system, by saying every country subsidizes agriculture. Trump said the United States will report in the next two weeks what it intends to do with the North American Free Trade Agreement (NAFTA), which he has promised to renegotiate.

The threat to get rid of or alter NAFTA has clouded the economic outlook for Canada, whose biggest trade partner is the United States. He also said he saw an opportunity to engage with the U.S. President.

Trudeau said his government has told the new US administration that Canada does not view the negotiations as a "zero-sum game" but that there are ways to improve NAFTA, which also includes Mexico, for everyone.

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 - are not included in the NAFTA agreement.

US dairy groups appealed to Trump for help after Canada recently introduced a new policy that gives Canadian producers an incentive to buy domestic supplies of ultra-filtered milk, a concentrated ingredient used to boost protein content in cheese and yogurt.

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