Date of Award
12-1-2018
Degree Name
Master of Science
Department
Agribusiness Economics
First Advisor
Moon, Wanki
Abstract
NAFTA is turning 25 years old and is in desperate need of modernization. The contentious yet game-changing multilateral free trade agreement has had no shortage of political detractors and proponents over the years, but on May 18, 2017 President Donald Trump officially signaled its renegotiation to the U.S. Congress. Agricultural producers from all three countries have greatly benefited from free trade with their North American neighbors, but Canada insists on maintaining their restrictive supply management system and tariff rate quotas on dairy imports. The Dairy Farmers of Canada (DFC) fear a NAFTA renegotiation could not only threaten their lucrative system but also remove an important check against unfettered subsidization of U.S. dairy producers. The DFC have repeatedly criticized the magnitude of U.S. dairy subsidies, especially during the Farm Bill legislation process every four years, attributing rising milk supply glut and lower global dairy prices to their size. Although subsidies do aid U.S. producers’ bottom line and global competitiveness, they do little to explain efficiency discrepancies between nations or justify Canadian protectionism. Using empirical research and statistical analysis, the validity of these arguments will be tested to better determine the future of dairy production within NAFTA and beyond.
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