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U.S. Holding Canada Accountable for USMCA Violations

January 5, 2023

After a steady – and loud – drumbeat of NMPF and USDEC insistence that Canada must honor its dairy obligations in the U.S.-Mexico Canada Agreement (USMCA), the U.S. Trade Representative (USTR) announced Dec. 20 that it is filing a new request for dispute settlement consultations with Canada.

The move will expand the scope of a second USMCA dairy dispute to include additional elements necessary to ensure that Canada fully complies with its USMCA market-access obligations. Since the United States launched its initial USMCA dispute panel in May 2021, NMPF and USDEC have fully and vocally supported USTR and USDA in their dogged attempts to secure for American dairy producers the agreement’s full negotiated benefits.

For over a year, Canada has violated USMCA’s tariff-rate quotas (TRQs) provisions by reserving most of its preferential dairy TRQs for Canadian processors. Canada’s revised approach to TRQs, released in March 2022, still violated the agreement – prompting USTR to pursue a second USMCA enforcement action.

While NMPF is grateful for USTR’s meticulous work that has led to this new announcement, Canada has a long history of restricting trade and not honoring existing agreements. NMPF and USDEC will push for retaliatory measures that make Canadian officials reconsider their actions should that continue.