Canada was found to be limiting dairy market access in a dispute settlement panel proceeding related to the U.S.-Canada-Mexico Agreement (USMCA). Industry groups including the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) celebrated the landmark decision. The dispute was in relation to tariff-rate quotas (TRQs) commitments, which the U.S. claimed were violating the terms established un the USMCA. The USMCA Dispute Settlement Panel issued its final report in favor of the U.S. on December 20, 2021, giving Canada 45 days to comply with the findings.
“This ruling is a big step for the U.S. dairy sector towards realizing the full benefits of the USMCA and securing real access to the Canadian market for additional high-quality American dairy products,” Agriculture Secretary Tom Vilsack said in a press release. “In order for trade deals to be effective and have the trust of the American people, they must be enforced. Today’s action reflects the Biden-Harris Administration’s deep commitment to enforcing the USMCA and to ensuring that trade rules work for American farmers, ranchers and producers.”
The Office of the U.S. Trade Representative requested that a panel be established to evaluate Canada’s execution of dairy provisions under the USMCA back in May of 2021. Dairy industry groups had raised concern that Canada’s dairy TRQ measures were impeding dairy market access for U.S. products. By setting aside a significant number of TRQs for Canadian processors, Canada was found to be in violation of the parameters of the USMCA.
“The United States and Canada negotiated specific market access terms covering a wide variety of dairy products, but instead of playing by those mutually agreed upon rules, Canada ignored its commitments. As a result, U.S. dairy farmers and exporters have been unable to make full use of USMCA’s benefits,” said Jim Mulhern, President and CEO of NMPF. “Today’s decision is an important victory for U.S. dairy farmers and the millions of Americans whose jobs are tied to the U.S. dairy industry.”