June 13, 2018

A SURPLUS OF IGNORANCE:

A Trumped-up charge against Canadian dairy tariffs (Roger Noll and Robert E. Litan, June 13, 2018, Brookings)

First, Canada's props up its dairy industry by using both import quotas and domestic production quotas. As part of this system, Canada has negotiated import quotas with each of its major trading partners.  The U.S. has obtained a favorable quota and, as a result, exports more dairy products to Canada than it imports from Canada. In 2017, Americans sold $792 million in dairy products to Canada, while Canadians sold $149 million in dairy products to the U.S., creating a tidy trade surplus for the U.S. of nearly $650 million. [...]

Fifth, the U.S. would have undoubtedly sold substantially more dairy products to Canada had the Canadian quota system not been in place, so getting rid of import restrictions against U.S. dairy products is an excellent idea.  But Canada had already agreed to give up both dairy import quotas and almost all dairy tariffs as part of its commitments under the Trans-Pacific Partnership. Thus, the only reason import restrictions on dairy products are even an issue is because the U.S. withdrew from the TPP.

Posted by at June 13, 2018 6:57 PM

  

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