The United Kingdom is Canada’s third-largest trading partner, with tens of billions of dollars in goods and services being traded between the two nations each year. Therefore, it’s serious business when the UK decides to slam the brakes on trade negotiations that have been ongoing for years now.
So what was the sticking point in negotiations that led to the collapse of talks with the UK? Which Canadian product is so dear to the Canadian government that they won’t bend an inch when it comes to allowing competing imports from other nations?
Yes, along with a small market for luxury car imports, the Canadian government is hung up on allowing cheese imports into the nation’s very jealously protected dairy market.
Due to supply management policies, Canada has some of the highest-priced dairy products on the planet along with some of the most limited product selection.
Above and beyond the direct costs to consumers from Canada’s dairy policies, the nation suffers from constant trade disputes over the protectionist policies related to dairy products. The UK trade dispute is only the latest one.
How many industries and how much trade is Canada willing to put at risk with its stubborn insistence on maintaining controls over the dairy market?
As with most issues emanating from Ottawa these days, politics rather than pragmatism are at the root of the problem.
Canada’s dairy cartels are very effective political lobbyists. Neither the Liberal nor the Conservative parties are willing to question the sanctity of Canada’s supply management system no matter how much it costs citizens. The dairy industry contributes far too much to the campaigns of both parties for them to risk losing those dollars.
Further, while Quebec only makes up 23 percent of Canada’s population, the province has cornered 37 percent of the country’s dairy farms while Ontario has 33 percent. With 70 percent of Canada’s dairy producers being in the two most critical provinces to win in federal elections, no major party will dare to rock the supply management boat.
Canada has an abundance of natural resources and refined products that could allow the nation to punch above its weight economically. To properly exploit those resources means having solid trade agreements, however, and Canada can’t reach those due to constant disputes over its dairy policies.
If the Trudeau government wants to see a fast resolution to several trade disputes, all it has to do is lighten up its grip on the dairy industry. The nation is losing untold potential billions in trade and all over something as petty as cheese.
It doesn’t get more Canadian than that.