No tears over spilled milk as Canada fires back at Trump

Ottawa's envoy to Washington downplayed talk of growing trade irritants with the US, a day after President Donald Trump sharply criticized Canada's well-guarded dairy sector.

Canada's ambassador to the United States, David MacNaughton, said Wednesday that he expected "constructive discussions" around dairy and other issues if NAFTA is renegotiated.

But after dairy farmers in Canada's largest province of Ontario complained about competing with lower US prices for the milk product, the Ontario government changed the rules to allow local processors to purchase ultra-filtered milk from Canadian farms at competitive world prices rather than import the milk protein isolates from the United States.

Trump did not specify what parts of Canada's tariff-protected dairy sector he wanted to change, nor what measures he would take to make it happen, but his remarks re-ignited calls for a complaint to the World Trade Organization.

As Canada imposed import taxes on ultra-filtered milk, which was duty-free before but changed after milk producers complained, in US about 70 dairy producers are affected.

Trump also reiterated his threat to eliminate the North American Free Trade Agreement (NAFTA) with Canada and Mexico if it can not be changed.

The senator said the Central New York business could be severely hurt by Canadian rules limiting the import of American dairy used in the manufacture of cheese.

The President called Canada's system "unfair" during a stop in Kenosha, Wisconsin, where he also signed his Buy American and Hire American executive order. Walker and Wisconsin's congressional delegation, including House Speaker Paul Ryan, to find a solution to the trade dispute. His letter referenced a dairy outlook report from the U.S. Department of Agriculture which he says "clearly indicates the poor results in the U.S. sector are due U.S. and global overproduction". They also asked Trump to direct US agencies to "examine a full range of tools that could be used immediately to impress upon Canada in a concrete way the importance of dependable, two-way trade".

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"I welcome President Trump's statement yesterday taking issue with Canada's damaging new dairy pricing policies that are unfair trade barriers harmful to American dairy farmers", Schumer said today.

Trump alluded to a milk ingredient class created in Ontario last April that allows Canadian ingredients to be more competitive domestically.

"Time and again Canada has demonstrated its disregard of its dairy commitments to the United States - hampering America's exports to Canada - while pursuing ways to use its government-controlled system to unfairly dump greater Canadian exports in global markets".

Indeed, Canada's softwood industry makes no secret of its own search for opportunities in China.

Canada Wood, an industry trade group, said earlier this month it would "take the first steps to extend its reach to Wuhan, which is the economic engine of central China", by establishing a joint Sino-Canadian Modern Wood Construction Technology Center in the little-known Chinese city of more than 10 million.

The work would start immediately, he added. "At the same time, the US has a $400-million dairy surplus with Canada".

"Ultimately governors and people in the states recognize the importance of our relationship and that it's two-way, and we are going to continue to build on that", McNeil said. He told The Canadian Press that despite some US rhetoric and his rebuttal letter sent to USA officials on Tuesday, he still expects "constructive discussions" between the two countries.

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