NAFTA and the infant formula shortage

 Canada has lots of baby formula. Why can't we just import some? Read on. Trump, America First, Dairy industry, re-negotiated NAFTA with no provisions for emergencies.

Jim Wright

So, why can't we just import baby formula?

Heh heh, glad you asked.

Ever heard of the United States Canada Mexico Agreement? That bit of legislation Trump and Republicans proudly replaced NAFTA with?

Remember Trump bragging about that? Remember?

That. That's why.

Three (or four, depending on your point of view) American companies control 90% of the global infant formula market, chief among them is Abbott Nutrition. When a Chinese company announced it was investing in a Canadian manufacturing facility to make powdered baby formula from excess Canadian skim milk powder (Canada makes a lot of butter, so they have a lot of leftover skim milk), Abbott and the US diary industry spent millions lobbying congress to change the trade rules -- claiming increased Canadian production of formula would "negatively impact U.S. dairy trade and jobs."

Here's the actual 2018 lobbying statement from the International Dairy Foods Association (which despite the name, is a lobbying group for the AMERICAN dairy industry): https://www.documentcloud.org/documents/22014622-ustr-idfa

And so, when the Trump Administration backed by a Republican congress wrote and implemented the USCMA to replace NAFTA, they imposed new regulations restricting commercial importation of baby formula from Canada (you can still import it for your own personal use, though you'll have to pay extra for it and there are limits. Also, I'd think twice about buying it from Canada and then trying to resell it at jacked up prices on eBay without checking that law first).

This is part of the US government's long history of protecting the very powerful US dairy industry, which has always imposed very high tariffs on importation of dairy products from Europe and Asia. And even previous free trade agreements (such as NAFTA) imposed pretty specific restrictions on the import of formula from our free trade partners, such as Canada, to protect the American monopoly by companies such as Abbott. The USCMA *significantly* increased those restrictions and imposed draconian fees. A good breakdown of this entire complex situation is here: https://thedispatch.com/.../americas-infant-formula...

There's a lot more to it, such as FDA restrictions on nutritional standards and labelling, but that's the basics.

So when Abbott contaminated its production line and was forced into a massive recall, well, for Americans, there just ISN'T any other place to get infant formula. And you can thank the dairy industry, and their lackies in Congress (and, yes, the White House) for that.

American industry, unfortunately, CAN'T just spin up to replace the lack of supply from Abbott. Because the Dairy Industry has worked very hard over several decades to ensure the supply of infant formula is strictly managed to maintain a steady profit margin. Couple that to suppliers and retailers who are right now hoarding and/or restricting supplies to (allegedly) prevent panic buying (but are really just increasing their profits in the traditional manner of supply and demand capitalism), AND add in supply chain problems, including those deliberately imposed to INCREASE lack of supply (like the actions of a certain Texas governor) and here we are.

Oh, by the way, the problem that led to contamination at the Abbott plant in Michigan? Instead of investing in sanitation and upgrades, Abbott spent the last few years and $3 billion buying back its own stock.

That's the gestation (I'm not sorry) of the current crisis.

So, when you see members of Congress who WROTE THOSE LAWS right now blaming the CURRENT president for the lack of infant formula on store shelves...

When you see the very same pundits and news anchors blaming Joe Biden for a crisis caused by the very same trade agreement they themselves cheered two years ago...

Well, you know where that full diaper you're smelling came from.