Another USMCA Dispute Panel Sought Due to Canadian Dairy Policies

Brian German Agri-Business, Dairy & Livestock, Dairy and Livestock, Industry, Trade

The U.S. is establishing another dispute panel in relation to Canadian dairy policies, according to U.S. Trade Representative Katherine Tai. At issue is Canada’s dairy tariff-rate quota (TRQ) allocation measures running contrary to parameters set forth in the U.S.-Mexico-Canada Agreement (USMCA). The U.S. won a previous dairy dispute with Canada, however, efforts to remedy the issue have not fixed the problem.

Dispute Panel

 “With this panel request, we are utilizing our available tools to enforce our trade agreements and ensure that U.S. workers, farmers, processors, and exporters receive the full benefits of the USMCA,” Ambassador Katherine Tai said in a news release. “Canada made commitments to the United States in the USMCA, and the Biden-Harris Administration is ensuring that they honor those commitments.” 

The claim is that Canada’s TRQs are essentially excluding retailers and other importers from using the allocations and purchasing American dairy products. Canada’s TRQs have been a consistent issue, with a dispute panel finding Canada to be in violation of USMCA obligations back in December of 2021. Several lawmakers also recently weighed in on the issue, encouraging action to make certain that the USMCA was being fulfilled.

“International trade is critical to economic growth and stability for American producers,” said Agriculture Secretary Tom Vilsack. “This panel request is necessary to ensure Canada honors their commitments as they relate to dairy, and so American producers have greater export opportunities as intended.”

While U.S. organizations such as the National Milk Producers Federation and U.S. Dairy Export Council expressed support for the action, Canadian officials appear resolved in defending their TRQs. Canadian Trade Minister Mary Ng said, “we will stand firm against attempts to re-negotiate during this dispute-settlement-panel process.” The U.S. would have the right to impose retaliatory duties if the dispute panel rules that Canada has been violating terms of the USMCA and there is nothing done to fix the issue.

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Brian German

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Ag News Director, AgNet West