Thank you.
My name is Aaron Fowler. I'm Canada's chief agriculture negotiator from AFC.
The export monitoring provisions and export thresholds that are established for skim milk powder under this agreement are unusual. They're not akin to similar provisions in our other FTAs. They were included here because of specific concerns of the United States with respect to aspects of the Canadian supply management system for dairy, and in particular, aspects of the national dairy ingredients strategy that was introduced in 2017. It was a new pricing approach for certain dairy products that was intended to encourage investment and innovation in this sector.
The effect of those pricing changes on the United States resulted in two main areas of concern to them. One was they lost access to the Canadian dairy market for certain products where they had previously been quite competitive, and they saw themselves competing increasingly with Canadian exporters in certain specific types of dairy products where Canadian exports had not traditionally been so high.
As an alternative to addressing their concerns, which they wanted to address by dismantling the supply management system for dairy, we looked for ways to respond to those concerns that would be acceptable to both parties. We explored many ways of doing that with respect to Canada's dairy exports to third countries and ultimately settled on this as the least objectionable way forward.