April 20, 2017 / 4:23 PM / 4 months ago

Trudeau defends Canada's dairy system against Trump protectionist charge

FILE PHOTO: Canadian Prime Minister Justin Trudeau (R) is greeted by U.S. President Donald Trump prior to holdiing talks at the White House in Washington, U.S., February 13, 2017.Carlos Barria/File Photo

OTTAWA (Reuters) - Canadian Prime Minister Justin Trudeau on Thursday brushed off an attack by U.S. President Donald Trump on Canada's system of dairy protections, saying every nation defended its agricultural industries.

Trudeau told Bloomberg Television that the United States in fact ran a dairy surplus with Canada. Trump took aim at Canada's dairy industry this week and said on Thursday "what they've done to our dairy farm workers is a disgrace".

Canada's dairy sector is protected by high tariffs on imported products and controls on domestic production as a means of supporting prices that farmers receive.

Trudeau said the system "works very well" in Canada.

"Let's not pretend we're in a global free market when it comes to agriculture," he said. "Every country protects, for good reason, its agricultural industries."

Trump's comments were the second time this week he has attacked Canada's dairy industry and on Thursday he included the lumber, timber and energy sectors in a list of what he said were problematic areas of trade.

Canadian Foreign Minister Chrystia Freeland, asked for a reaction, rejected the suggestion of wrongdoing.

"Canada strongly believes in a rules-based system of trade, and therefore always abides by and upholds the rules that govern trade," she said in an e-mailed statement.

Trump said the United States will report in the next two weeks what it intends to do with the North American Free Trade Agreement (NAFTA), which he has promised to renegotiate.

The threat to get rid of or alter NAFTA is a potential problem for Canada, whose biggest trade partner is the United States.

Trudeau said he would not "overreact" and planned to move the trade conversation forward "in a way that both protects our consumers and our agricultural producers." He also said he saw an opportunity to engage with the U.S. President.

"He has shown if he says one thing and actually hears good counter arguments or good reasons why he should shift his position, he will take a different position if it's a better one, if the arguments win him over," Trudeau said.

The two nations are embroiled in a long-standing dispute over exports of Canadian softwood lumber, which U.S. producers complain are unfairly subsidized.

"Our producers and workers have never been found in the wrong .. the United States needs Canadian lumber. A protracted dispute will only drive up the cost of wood and homes for U.S. consumers," Freeland said.

Reporting by Leah Schnurr and David Ljunggren in Ottowa; additional reporting by Jeff Mason in Washington; Editing by Grant McCool

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