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NAFTA Sticking Point Number One: The Dairy Industry

by John Brian Shannon

One of the main sticking points in the ongoing NAFTA re-negotiation is Canada’s regulated dairy industry vs. America’s market-driven dairy industry. And it shouldn’t be.

The dairy industry in Canada uses a system called ‘Supply Management’ to produce only as much milk as is required (with no waste) for the Canadian market, and unlike the American dairy industry it isn’t an export-driven model.

Yet, it’s the United States under President Donald Trump that is pressing Canada to accept American milk into the Canadian market. That same United States subsidized its dairy industry to the tune of $22.2 billion (2015) a number that increases every year. In fact, without massive subsidies American dairy producers would go bankrupt in a year.

U.S. dairy subsidies equal 73% of producer returns, says new report

“Based solely on the USDA’s national average farm-gate price and national average costs of production, Clark says American dairy farmers lost money every year from 2005 to 2016. The report figures support granted to U.S. dairy farmers in 2015 represented approximately $0.35 per litre — almost three-quarters of producers’ revenue.” — RealAgriculture.com

Why President Trump or anyone in America’s dairy industry would want to subsidize Canadian consumers by $1 per gallon is a complete mystery.


American Milk Has High Levels of Growth Hormone and Antibiotics that are Illegal in Canadian Milk

Not one gallon of U.S. dairy product is allowed to be sold in Canada for this reason, although some Canadians do cross the U.S. border and are allowed by the Canada Border Services Agency to return with small amounts of American dairy products for their own consumption (but not for resale).

There are up to 20 chemicals, hormones and antibiotics in milk and Monsanto’s glyphosate is toxic to dairy cows

“According to the Daily Mail, a study published in the Journal of Agricultural and Food Chemistry released information that cow’s milk contains traces of anti-inflammatory drugs such as niflumic acid, mefenamic acid, ketoprofen, diclofenac, phenylbutazone, naproxen, flunixin, diclofena. The researchers also discovered hormones (both natural oestrogen and 7-beta-estradiol), antibiotics, anti-fungal drugs, steroids and Anti-malaria drugs (pyrimethamine) in milk and dairy products.” — excerpt courtesy of SeattleOrganicRestaurants.com

Will Canadians want to purchase dairy products sourced in the United States where such growth hormones, chemicals and antibiotics are on the ingredient list? Likely not.

However, those living in poverty might. Prison administrators in Canada who feed thousands of people every day might enjoy saving $1.00 per gallon of milk and save even more by purchasing American cheese and other dairy products — those savings courtesy of the American taxpayer.


Canadian Cows are Happy Cows!

(Because they don’t have to take bovine growth hormone or other nasty medicines or chemicals)

The happy cows at Harmony Organic in Ontario, Canada

The cows at Harmony Organic in Ontario, Canada are happy because they don’t have to take bovine growth hormone or other chemicals or drugs. Image courtesy of HarmonyOrganic.ca

But it’s not all cowbells and sunny meadows for the Canadian dairy industry. Canada employs the Supply Management system which plots exactly how much milk will be required annually and the country’s milk producers must comply.

Canada’s dairy industry regulates the supply to ensure the optimum amount of milk for the Canadian market without the oversupply spikes or undersupply crashes that other countries experience due to market forces.

It means that every year some amount of Canadian dairy product is poured back onto the fields so that prices will stay high enough for Canada’s milk producers to stay in business. While pouring milk on fields re-adds vital nutrients to the soil it’s an expensive way for farmers to condition their soil. Consequently, it doesn’t happen very often.

Canada’s dairy industry is sized to fit the Canadian market and very little of the country’s milk is exported, therefore, American milk producers rarely compete with Canadian milk producers anywhere on the planet.

Canada’s dairy industry contributes about $20 billion CAD to Canada’s GDP, which is smaller than the $21 billion USD that the California dairy industry sells to Californians — but California also exports an additional $44 billion USD worth of dairy products to other U.S. states — and good for California! Both the Golden Bear state and other U.S. states benefit from the excellent growing and production conditions in California.


Summary

The Canadian industry threatens no other country’s dairy industry as it’s sized for Canadian needs alone — therefore, one wonders why President Trump wants to flood the Canadian market with subsidized American milk and other dairy products.

And the reason Trump wants to export U.S. dairy products is because there’s a huge supply glut in the United States which means that dairy producers there must either downsize or find new markets.

If President Trump wants to export American milk, here’s some food for thought; The total annual demand for milk in China is more than the United States could produce in 10-yearsand 1.35 billion Chinese citizens pay an average of $7.00 USD per gallon of milk while 327 million Americans pay an average of $2.39 USD per gallon.

American milk producers could charge Chinese consumers $5.50 USD a gallon (and not require U.S. subsidies due to the higher retail price in China) and still sell every gallon they could ever hope to produce!

America’s leaders must stop focusing on microscopic markets like Canada where the market is already saturated with established Canadian producers and concentrate their efforts on the huge unfilled demand economies like China where they pay so much for milk that American subsidies could be discarded entirely and U.S. dairy products would still be cheaper than what Chinese consumers pay now.

Unelected Operatives Attempt to Take Over the American Presidency

by John Brian Shannon

It’s happened in previous decades and it’s happening again. Unelected Americans working within a U.S. Administration are (apparently) circumventing the will of a democratically elected U.S. president.

It happened to president Reagan, to president Carter, to president Nixon, to president Kennedy (ushering in the loss of innocence in America, and destroying a noble family in the process) and it happened to Ike Eisenhower who was America’s five-star general and Supreme Allied Commander in WWII before becoming the president of the United States. And all these U.S. presidents were legally voted into office by American citizens via a rigorous democratic process.

America has a problem.


Were the Unnamed Operatives Elected to be President, or Was the President Elected to be the President?

Of course Donald Trump was elected to lead the American people, to have the privileges of the highest executive office in the land, and to hold the most powerful keys of the country’s armed forces.

In defense of the unnamed operatives; There’s no doubt that such people interfere in the proper operation of the White House for the most altruistic of reasons and believe wholeheartedly that they’re doing the right thing for the United States and feel very patriotic about the actions they take. Certainly they’re risking their careers to stand up for what they believe is ‘right’ for America.

Therefore, I sincerely and profoundly admire the motivations of such operatives, but the simple fact is they’re wrong to subvert the will of American voters who voted — not for political operatives to run the country — but for Donald Trump to run the country.

Whether I like or hate President Donald Trump as a person (or like or hate his policies) or whether I’m his biggest backer on both counts (I’m not) this discussion must be about democracy in America and who is, and who isn’t, allowed to tamper with the process.


Maybe Trump Is All The Anonymous Operatives Say He Is: Regardless, He’s Still the President

What if President Donald Trump really is everything his detractors say; “Amoral, Impetuous, Adversarial, Petty, Half-Baked, Ill-Informed, and Occasionally Reckless” or his worst sin I suspect, not being under their control as they would like?

These operatives want him under some kind of control — not because he is bad for the country — but because he’s big, powerful, and scary, and such people need to be kept under control! (Don’t they?)

In an anonymous Op/Ed posted at the New York Times today the operative or operatives wrote, “It may be cold comfort in this chaotic era, but Americans should know that there are adults in the room. We fully recognize what is happening. And we are trying to do what’s right even when Donald Trump won’t.”

Shocking that any unelected official would say it in any country about any leader — let alone in the United States of America — one of the best democratic nations in the world.

In some countries, writing or speaking such words might get you arbitrarily imprisoned for a number of years, it might get you dead, or it might be the reason you hideout in another country for the next 25-years.

Yes, I ‘get’ that he is big, powerful, and scary, and he doesn’t negotiate using the same tried and true methods as previous American presidents. And to some people that means they must step in to control the situation — because to them — it means the president is out of control.

Or is it they just don’t recognize that the guy really is some kind of weird genius who, using the weirdest methods possible (to them) gets his way (which to Donald Trump, means getting America’s way) and is a breath of fresh air to American politics.

He isn’t like the last holder of that office, nor will Donald Trump be like his successor whomever that may be. He’s a one-off, unique communicator, and definitely an agent of change for the country.

But in their own way, so were Barack Obama, George W. Bush, Bill Clinton, George H.W. Bush, Ronald Reagan, and many others. Such a disparate and talented group of individuals American presidents are — and each one in his own way cut across boundaries to do great things for the country they love. You have to admire them as individuals regardless of which side of politics you’re on.

Whether you like Trump’s style or not, he is accomplishing things for the country. Bombastic, irreverent, loud and in charge, or however you want to term his style, he gets results and bad press — although I’ve seen harsher media coverage of a U.S. president.

All administrations have their chaotic moments. Most however, have plenty of experienced politicians working for them who know how to cover it with the White House press corps. But such is not the case with the Trump White House. Many people who work there are ultra-patriotic Americans who would take a bullet for their country, yet they might not have decades of beltway experience to guide them around Washington’s invisible traps.

But as long as Trump feels he is accomplishing good things for the country, he’ll stay on as the country’s leader. But he’s the kind of person who would resign if he ever felt he wasn’t contributing to America’s success. Such is his love for the country.


He’s the President for as Long as ‘We The People’ Say He Is

Barring ill health or accident, Trump is the President for the next 2 1/2 years.

The position of the American president is, by careful design, the person elected to carry out the will of the people and is the person most responsible for, and the most responsive to, United States citizens. It goes with the office.

The president of the United States works for the American people and his loyalty must be to them, and ultimately is accountable only to them. But those who work for the president, work for the president and are accountable to the president, not to voters.

Therefore, if these operatives feel they can do a better job as president, they should submit their resignation (and, if they feel the need) post a copy in the New York Times outlining the reasons they worked to subvert the decisions of the elected president, and at the next election run for the top job themselves.

It’s an honourable way to register their disappointment with the nation’s chief executive.

Is the U.S. ‘Too Big’ for the Group of Seven?

by John Brian Shannon

Q: Are the concerns of a superpower relevant to the other G7 members? A: Not really.

Maybe it’s time for a superpower group of the U.S., China, the EU, Russia, and The Commonwealth of Nations to form up, instead of the G7 group that has worked very well until now.

Even the sage Moses who lived 3400-years ago, suggested, “Thou shall not plow with an ox and a donkey yoked together” and the reason is quite clear to every farmer. Being so dissimilar in size and power, both the ox and the donkey will be miserable the entire time they try to plow forward together and the farmer will spend most of his time ‘arbitrating’ disputes between the two and the plowing enterprise will get little actual plowing done.

It’s unfair to the U.S., it’s unfair to the smaller or weaker members of the G7 club and it’s unfair — even to near-superpowers like Japan and Germany which have far different challenges and causes to ‘plow’ than those of the superpowers.


Shall I list the ways?

If so, this would become a very long blog post indeed!

For just three examples:

  1. Which of the G7 partners have a negative balance of trade of $862.8 billion for 2017? The entire G7 combined doesn’t have a negative balance of trade anywhere approaching that of the United States.
  2. Which of the other G7 members have an inventory of nuclear warheads like the United States which includes 6450 nuclear warheads; 1750 that are retired and awaiting dismantlement, and 3800 that remain part of the U.S. stockpile?
  3. If we’re talking GDP, the U.S. represents 52.8% of the Group of Seven’s GDP, while the next largest country in the group (Japan) represents 13.3% of GDP, with only Germany at 10% remaining as the only other double-digit GDP member of the G7.

Population figures and economic growth indicators may be even more telling than the above indicators of superpower status.


Should the U.S. Join It’s Own 1-Member Club?

That may be a tempting thought for President Donald Trump and certain members of his administration, but there are common concerns among superpowers that only apply to superpowers (and there’s no doubt the U.S. remains the Number One superpower by a significant margin) and it’s those superpowers that must work together to deliver solutions for their large populations.


If we look at a superpower club of 5 members: The United States, China, the EU, The Commonwealth of Nations and Russia, we’re looking at a group that is roughly comparable to each other and have similar challenges.

Let’s look at our three main indicators, just to be certain:

GDP

Big 5 (Nominal) GDP
U.S.A. --------- $20.3 trillion (USD) (Focuseconomics.com)
China ---------- $13.0 trillion (USD) (Focuseconomics.com)
EU ------------- $19.7 trillion (USD) (IMF)
Commonwealth --- $10.4 trillion (USD) (Commonwealth.org)
Russia --------- $1.72 trillion (USD) (IMF/StatisticsTimes.com)

Although there are some disparities in nominal GDP among the five countries, we must remember that China is on an exponential growth curve while The Commonwealth of Nations statistic (provided by commonwealth.org) is from 2017 and their economic group is also growing at a rapid rate ($13 trillion by 2020). Russia is the outlier in this group, however, as we shall see, that country has other (huge) chips on the table when it comes to retaining its superpower status.

Top 10 Countries as ranked by GDP includes G7 countries. Image courtesy of FocusEconomics.com

Top 10 Countries as ranked by GDP — includes G7 countries. Image courtesy of FocusEconomics.com


Nuclear Warheads

Big 5 Nuclear Warheads
U.S.A. --------- 6450 (Federation of American Scientists)
China ----------  270 (Federation of American Scientists)
EU -------------  300 (Federation of American Scientists)
Commonwealth ---  485 (Federation of American Scientists)
Russia --------- 6850 (Federation of American Scientists)

Although nuclear stockpiles vary, the U.S. and Russia were the main protagonists of the Cold War which lasted from 1950 through 1990 which is why they own far more nuclear weapons than all other countries combined. The only EU country to publish their ownership of nuclear weapons is France, with 300 warheads. The Commonwealth of Nations countries that publish ownership of nuclear weapons include the UK, Pakistan and India.

G7 comparison: Estimated Nuclear Warhead Inventories, 2018. Federation of American Scientists

Estimated Nuclear Warhead Inventories, 2018. Federation of American Scientists


Balance of Trade Issues

Big 5 Balance of Trade (in U.S. Dollars)
U.S.A. --------- $-862.8 billion (2017) (Handlesblatt/IMF/WTO)
China ---------- $+98.46 billion (2017) (TradingEconomics.com)
EU ------------- $+44.45 billion (2016) (Statista.com)
Commonwealth --- $-187.5 billion (2015) (Commonwealth.org)
Russia --------- $+115.3 billion (2017) (Statista.com)

GDP and Balance of Trade among the G7 countries in 2017

While balance of trade issues vary wildly between the United States, China, the EU, The Commonwealth of Nations and Russia, very few countries can play in the triple-digit or even high double-digit space occupied by those nations. Especially when analyzed using their (Nominal) and (Purchasing Power Parity) GDP numbers, these are exceptional nations and groupings of nations, which put them in a different category than other countries.


The Big 5 (B5) A Better ‘Fit’ for the United States, China, the EU, The Commonwealth and Russia

There is nothing wrong with small countries and there is nothing wrong with big countries. But small countries have far different challenges than large countries, and everything happens on a truly massive scale for the bigger countries and in country groupings like the EU and The Commonwealth of Nations.

And those differences cause irritations.

Instead of heads of government trying to plow forward with their challenges and issues while ‘yoked’ to dissimilar and dissimilar-sized partners, why not make it easier on everyone and ‘put like with like’ to gain a more comfortable fit?

It’s so obvious this should be done and the latest G7 meeting proves that the problems in that organization are systemic problems and are the sole cause of divisions between the oddly mismatched countries of that group.


The ‘Big 5’ followed by the ‘Next 20’

Every country stuck in a trade or political grouping that doesn’t match it’s particular talents will suffer. Therefore, the Big 5 must form into a group of their own, and the G20 (minus the by-then departed ‘Big 5’ members) must attract ‘the Next 20 nations’ to their refashioned N20 organization.


Helping Every Country and Individual to Become All That They Can and Should Be

In that way, the top 25 countries in the world can finally become all that they can and should be instead of being held back by arbitrary, mismatched, or outdated groupings.

And, isn’t that what it’s really all about?

!!!