Tuesday, both the National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) commended the U.S. Trade Representative’s announcement that it is filing a new request for dispute settlement consultations with Canada in order to expand the scope of the second U.S.-Mexico-Canada Agreement (USMCA) dairy dispute to include additional elements necessary to ensure that Canada fully complies with its USMCA obligations.
The initial USMCA dispute panel, launched by the U.S back in May 2021, found Canada in violation of USMCA’s tariff-rate quota (TRQ) provisions by reserving most of its preferential dairy TRQs for Canadian processors. In March 2022, Canada released its revised approach to USMCA TRQs, which still violated the USMCA, by providing inequitable advantages to Canadian dairy processors and failing to administer TRQs in a manner to ensure full use of TRQs as intended by USMCA. This prompted USTR to request formal consultations with Canada over the measures, the first step in bringing a second case before a USMCA dispute settlement panel.
The dairy groups note Tuesday’s actions are the culmination of months of painstaking work to evaluate the strongest basis for the U.S. case and find the best approach to bring Canada into compliance given its persistent violations.
Jim Mulhern, president and CEO of NMPF said, “We thank USTR and USDA for their diligence in working to ensure that American dairy producers have the market access promised under USMCA. NMPF is committed to doing everything it can to support the case.” He said, “At the end of the day, if Canada continues to flagrantly flout its obligations, the U.S. government has to be ready with retaliatory measures that make the Canadian government reconsider its actions.”
Krysta Harden, president and CEO of USDEC said, “It is deeply unfortunate that Canada simply refuses to honor the full terms of our agreement. “USMCA is a fair deal that was thoroughly negotiated and agreed to by the Canadian government.” She said, “The U.S. dairy community is thankful the administration and Congress have taken Canada’s violations seriously and are fighting for full export benefits that the American dairy industry earned.”