Ottawa prepared to give up dairy tariffs to enter into European Markets
The Canadian government is currently having negotiations with European Union regarding the removal of tariffs on European dairy products. In the previous negotiations made the EU and the Canadian government enables a limited number of imports to enter Canada tariff free. However, the EU wants to increase their existing tariff free Canadian-bound dairy products and provide a semi-free trade deal with the Canadian government. In exchange to the removal of tariffs, the Canadian government is look for access for Canadian dairy products to enter the European market.
If a mutual agreement is achieved, there will be an increase in the trading capacity between Canada and the EU beyond the existing trading in other products such as raw materials and automobiles. This will become a benefit to domestic consumers since more choices are available. However, there are critics that continue to argue that it will be a threat against domestic dairy farmers, since the price of dairy may fall when increase in market supply increases and more levels of competition. The counter argument would be that domestic farmers can have their products sold in the European market as well.
US and Mexico Reaches Tomato Agreement
Earlier this week, there were negotiations between the United States and Mexico on the agreements upon the trading of tomatoes and other farm goods between the two countries. In the previous agreement, the Mexican tomato farmers were furious at the terms that the US and the Mexican government signed upon the tomato prices and the restrictions that the Mexican farmers have to abide to. The minimum price of the tomatoes was decided by a ‘reference price’ drafted by the United States, and creating a great advantage for the US wholesalers and consumers. Because of these terms, many farmers were forced to shut down since they can’t make a living out of the industry and even the remaining farmers are still struggling.
In the new agreement, both sides have agreed upon a higher price that will keep the Mexican farmers to continue to supply the US. The negotiation process and the previous agreements reflect upon the volatility of the North American Free Trade Agreement (NAFTA). The reason is because the NAFTA is greatly beneficial for the Developed countries as they have more capital and market power to control the prices of good. In the case of Mexico, which is struggling to build up its nation step by step in both economically and socially, they must make their own stand and turn the tables of NAFTA to help with their growth in the future.