Diplomat Jim Patterson on the Canadian Dairy Dispute Holding Up TPP

Canadian Subsidies Distort Trade

The current U.S.-Canada dairy dispute blocking finalization of the Trans-Pacific Partnership is a legacy of the Clinton administration’s Nafta failures

Published July 16, 2015 5:43 p.m. ET in response to a Wall Street Journal article on Canadian dairy subsidies distorting trade. All subsidies distort trade and the US is the biggest trade distorter on agricultural products and the loudest to shout over agricultural subsidies by other nations. There is too much soft diplomacy, assurances, side letters, etc. etc. that nullify major portions of trade agreements, benefit corporate agribusiness, penalize small farmers and adversely impact labor markets. Politicians are poor negotiators.

The public despises NAFTA for all the wrong reasons. It was a distorted free trade agreement by US and Canadian political interests and commodity groups. 

Dear Sirs, 

I speak as an agricultural economist (Auburn University) who worked on the North American Free Trade Agreement at the U.S. Department of Agriculture in the 1990s. The current U.S.-Canada dairy dispute blocking finalization of the Trans-Pacific Partnership is a legacy of the Clinton administration’s Nafta failures (“U.S.-Canada Dairy Dispute Sours Trade Negotiations,” U.S. News, July 11).

It was a huge mistake by U.S. negotiators to allow Canada to legally violate the terms of Nafta with regard to dairy. Former President Bill Clinton also let U.S. commodity groups violate the terms of Nafta. Only Mexico is forced to comply with the most oppressive terms of Nafta to protect U.S. and Canadian trade interests. Is there any wonder why most Americans don’t trust Washington on so-called free-trade deals?

Do the Canadian dairy subsidies distort trade in dairy products? Yes, they do, and they distort trade far beyond dairy. President Obama and USDA Secretary Tom Vilsack and the whole of the U.S. are seeing just how distortive these and other subsidies can be. They are holding up a trade deal economically vital to the U.S. and its Asian trading partners. The Clinton legacy of “free trade” distortion will limit the success of the TPP unless Canadian subsidies are eliminated.

James Patterson
San Francisco