December 27, 2022

US requests third dispute-settlement consultations on dairy quotas with Canada

The US is asking for dispute-settlement consultations on dairy quotas with Canada under the United States-Mexico-Canada Agreement (USMCA), the third time they have done so, following the discovery of areas of "deep concern" and measures inconsistent with obligations in the agreement, BusinessNews reported.

The US Trade Representative office said that Washington is broadening its challenge to include Canada's use of a market-share approach to quota setting. They said that the allotment cannot be accessed by qualified applicants in Ottawa's law, including retailers and food service providers.

After voicing its concerns in both January and May, Washington is challenging Ottawa on the dairy issue for a third time using provisions in the US-Mexico-Canada agreement. The USTR stated that the US may ask for the creation of a panel under the USMCA if the parties are unable to resolve the issue through consultations.

Tom Vilsack, the US Agriculture Secretary Tom Vilsack, said by not removing its trade restrictions on US dairy producers, Canada is in violation of its commitments under the USMCA.

Through tariff-rate quotas, or TRQs, Canada agreed to expand duty-free or reduced tariff access to dairy products under the USMCA, which went into effect in July 2020. However, Canada was restricting the ability of other groups, like retailers, to purchase American goods by giving the majority of those imports to processors.

Mary Ng, Canada's Trade Minister, said the country looks forward to carrying out its obligations under the trade agreement.

Ng said the dispute-settlement panel has repeatedly stated that Canada's supply-management system complies with all of obligations under international trade agreements, adding that the trade agreement's terms were respected and supported.

-      BusinessNews