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Report: US agriculture secretary says Canada must scrap milk protein policy

U.S. Agriculture Secretary Sonny Perdue said Canada needs to end its policy of low-price milk proteins to reach a deal with the U.S. on the renegotiation of the North American Free Trade Agreement, after talks between the two sides ended Sept. 7 without a deal, Reuters reported.

In an interview on C-SPAN television, Perdue said Canada must end its so-called Class 7 pricing scheme, which allows Canada to price milk ingredients such as protein concentrates, skim milk and whole milk powder. It has led to an oversupply of milk proteins, which is affecting U.S. dairy farmers, Perdue said.

The dairy market is one of the last sticking points in negotiations between U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland. National Economic Council Director Larry Kudlow said last week that milk was the main issue preventing a NAFTA deal from being reached.

Talks between the U.S. and Canada are expected to resume after Lighthizer's visit to Brussels for trade talks with Cecilia Malmström, the European Commissioner for Trade. U.S. President Donald Trump earlier reached a bilateral trade deal with Mexico and threatened to exclude Canada from NAFTA.

Freeland said Sept. 7 that the two sides were making progress on the renegotiation of NAFTA and Canada is optimistic that a deal can be reached.