U.S. officials are moving forward in addressing a dairy dispute related to the U.S.-Mexico-Canada Agreement (USMCA). A dispute settlement panel has been requested and established to review actions taken by the Government of Canada. U.S. dairy producers have been calling for action, accusing Canada of undermining the ability of American dairy exporters to compete in the Canadian market. A coalition of nearly 70 dairy organizations had recently sent a letter to Ambassador Tai encouraging action on the issue.
“A top priority for the Biden-Harris Administration is fully enforcing the USMCA and ensuring that it benefits American workers,” U.S. Trade Representative Katherine Tai said in a press release. “Launching the first panel request under the agreement will ensure our dairy industry and its workers can seize new opportunities under the USMCA to market and sell U.S. products to Canadian consumers.”
The dairy dispute revolves around Canada’s allocation of dairy tariff-rate quotas (TRQ). U.S. officials are challenging the set-aside of a percentage of each dairy TRQ exclusively for Canadian producers. The Office of the U.S. Trade Representative notes that Canada has been reserving a certain amount of quota over the past year, which conflicts with the commitment established in the USMCA. The issue is still far from being resolved, as the panel-selection and subsequent report is expected to take several months.
“This is an important step for American agriculture, and one that brings the U.S. dairy sector closer to realizing the full benefits of the USMCA,” said Agriculture Secretary Tom Vilsack. “Ambassador Tai’s action today will help ensure that Canada upholds its commitments under the USMCA and puts our other agricultural trading partners on notice that they must play by the rules. I am hopeful of a swift resolution that allows Canadian consumers access to high-quality U.S. dairy products and delivers the economic opportunities promised under USMCA to U.S. dairy farmers.”