The United States' second formal trade complaint in its ongoing dispute with Canada over dairy import quotas is about the northern partner's reported failure to live up to its commitments.
The U.S. requested a second dispute settlement panel under the U.S.-Mexico-Canada Agreement, announced by U.S. Trade Representative Katherine Tai in a U.S. Department of Agriculture news release issued May 25. The U.S. is asking for "dispute settlement consultations with Canada" to "address dairy restrictions by Canada that are contrary to its USMCA commitments."
“Canada’s protectionist dairy policies are a top concern for the U.S. Department of Agriculture under the Biden-Harris administration,” Secretary of Agriculture Tom Vilsack said in the release. “Canada has failed to honor and implement its USMCA commitments by removing the trade restrictions that disadvantage and deter U.S. dairy producers and exporters from enjoying real and meaningful access to the Canadian market.
"Obtaining that access remains a top priority for the administration, and we are considering all options available to achieve this objective,” Vilsack added, according to the release.
Tai said in the news release that she is "deeply troubled" by Canada's expansion of its dairy tariff-rate quota restrictions.
"We communicated clearly to Canada that its new policies are not consistent with the USMCA and prevent U.S. workers, producers, farmers and exporters from getting the full benefit of the market access that Canada committed to under the USMCA," Tai said in the release. "We will continue to work with USDA to ensure that our dairy industry can bring a wide range of high-quality American products to Canadian customers."
The release reported the U.S. is also challenging Canada's practice of parceling out its tariff-rate quota a few months at a time, instead of fully allocating its annual dairy tariff-rate quota.
"Through these measures, Canada undermines the market access that it agreed to provide in the USMCA," the news release said.
The request for this panel is the second time the U.S. has brought a dispute over Canada's tariff-rate quota allocation under the USMCA. The U.S. prevailed in its first dispute but Canada's implementation measures and other actions "moved Canada further away from full compliance with its USMCA obligations," the news release said.
"If the United States and Canada are not able to resolve U.S. concerns through consultations, the United States may request the establishment of a panel under the USMCA," the news release said.
