Class 7 Pricing Scheme in New NAFTA Deal

The American Dairy Coalition applauds President Donald Trump and U.S. Trade Representative Robert Lighthizer for their continued diligence and determination in reaching a fair and updated trade deal to replace NAFTA, now called the U.S.-Mexico-Canada Agreement (USMCA).  

The USMCA was announced late last night, fulfilling a promise President Trump made to farmers to eliminate Canada’s unfair Class 7 milk-ingredient pricing program.

In a joint statement Sunday night, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said “USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region. It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home. We look forward to further deepening our close economic ties when this new agreement enters into force.”

Trump administration officials said the USMCA eliminates Canada’s “Class 7” pricing system for milk ingredients and opens the Canadian dairy market to U.S. exports at an additional 3.59 percent (an increase from the 3.25% that was negotiated by the Obama administration under the Trans-Pacific Partnership).

Increased access to Canadian markets for dairy products was a major point of contention in trade talks, as was the termination of Class 7 pricing. The program saturated the international market with subsidized skim milk powder and cut the demand from Canadian cheesemakers for ultra-filtered milk from the U.S.  USMCA will include the development of new safeguards to prevent major export increases for certain dairy products.

The American Dairy Coalition applauds the hard work of those who made this agreement possible and will continue to ensure the interests of the 30,000 dairy producers we represent are upheld as additional details on USMCA become available.

The American Dairy Coalition (ADC) is a farmer-led national lobbying organization of progressive, modern dairy farmers. We focus on federal dairy policy. For more information, contact CEO Laurie Fischer at 920-965-6070.