USTR challenges Canada over manipulation of dairy access
CAROL RYAN DUMAS, 26 May 2021
U.S. Trade Representative Katharine Tai on Tuesday initiated a dispute settlement case over Canada’s manipulation of dairy tariff rate quotas to discourage imports of U.S. dairy products.
The U.S. dairy industry has had longstanding concerns about Canada undermining its trade agreements. Those concerns didn’t go away with U.S.-Mexico-Canada Agreement implemented last year.
The issue is Canada’s allocation of TRQs, which were supposed to increase access for U.S. dairy products. U.S. dairy groups contend Canada’s allocation system was constructed to discourage imports by reserving a large percentage of TRQs for Canada’s own dairy processors, who have no incentive to import competing U.S. products.
The bulk of TRQ access is reserved for domestic processors. Only a small amount is left for distributors, and retailers are completely cut out, the groups say.
Dairy groups have been calling for full enforcement of Canada’s trade obligations and were quick to respond to Tai’s request to initiate a dispute settlement panel.
“Canada has failed to take the necessary action to comply with its obligations under USMCA by inappropriately restricting access to its market,” said Jim Mulhern, president and CEO of National Milk Producers Federation.
