April 7, 2022

 

US Members of Congress urge immediate action on dairy access to Canada

 

 

US Members of Congress are pressing the Biden administration to enforce Canada's trade responsibilities in order to enhance market access for American dairy under the U.S.-Mexico-Canada Agreement (USMCA), Capital Press reported.

 

The US Trade Representative's office stated in January 2022 that it had won its first dispute settlement action under the USMCA, arguing that Canada's dairy tariff-rate quota (TRQ) allocations were in violation of the agreement.

 

A TRQ applies a preferential rate to a set amount of imported goods. Imports in excess of that amount are subject to even higher levies.

 

Canada reserves the majority of TRQ access for Canadian dairy processors, who have little motivation to import competitive U.S. goods, according to the US dairy industry. Canada's allocation mechanism offers distributors only a modest amount of TRQ access and none to retailers – two areas with the biggest incentive to buy US dairy products.

 

The Canadian government in early March proposed modifications to its current allocation mechanism. However, the US dairy sector rejected the plan, claiming that it accomplishes little to increase market access and rather perpetuates the present system's issues.

 

The US House members stated in their letter to Katherine Tai, US Trade Representative and Tom Vilsack, USDA Secretary that Canada's plan would continue to fall short of what the USMCA demands.

 

The members have insisted on significantly more comprehensive adjustments to put Canada's dairy TRQ allocation mechanism in line with its USMCA obligations.

 

Canada's plan continues to deny access to TRQs to Canadian retailers and foodservice businesses. They stated that the majority of TRQ volumes will continue to be sent to Canadian food businesses.

 

The National Milk Producers Federation and the US Dairy Export Council extended their gratitude to Congress.

 

Jim Mulhern, president and CEO of the National Milk Producers Federation said Canada has regarded its commitments to American dairy producers as a game, seeing what they can get away with.

 

Krysta Harden, president and CEO of US Dairy Export Council, expressed gratitude for the strong bipartisan support aimed at ensuring that US dairy exporters realise the advantages negotiated in the USMCA.

 

She said they are dedicated to working with the US government to ensure that the dairy market access agreed with Canada is fully implemented, benefiting both US dairy farmers and businesses as well as Canadian consumers.

 

-      Capital Press