Canadian Dairy Supply Management: Trade Threats
(5 pages of text)
Case (Pub Mat)
Following the election of Donald Trump as president of the United States, the US government set out to modernize the North American Free Trade Agreement, threatening to revoke it if a new favourable deal was not reached with Canada and Mexico. Among other demands, the United States wanted to increase its access to Canada’s protected dairy markets and was calling for the Canadian dairy supply management system to be dismantled. But the health of the Canadian dairy industry depended on supply management. In negotiating the new agreement, Chrystia Freeland, the Minister of Foreign Affairs for Canada, needed to consider the balance of domestic interests in supply management with Canada’s international trade priorities.
This case has been designed for use in undergraduate- and graduate-level courses on micro- and macroeconomics, government policy, or international trade. The case examines the political, economic, and trade implications of relaxing Canada’s dairy supply management system in an effort to appease US trade demands. After working through the case and assignment questions, students will be able to
- understand the interactions between competitive dynamics and domestic support programs;
- explain the framework of supply management in Canada;
- analyze the effects of domestic support programs on various stakeholders, including producers and consumers;
- understand the importance of international trade and its impacts on various industries;
- discuss general trade policy dynamics and priorities for countries; and
- appreciate how economics and politics interact.
Agriculture, Forestry, Fishing and Hunting
Canada; Mexico; United States, 2018
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