USTR Action on Canadian Dairy Quotas Welcomed
February 2, 2021
NMPF staff in January met with the USTR team tackling Canada’s administration of dairy Tariff-Rate Quotas (TRQs) while continuing Congressional outreach to ensure that the new administration and Congress continue the critical task of holding Canada accountable to its commitments under the U.S.-Mexico-Canada Agreement.
After sustained engagement from NMPF and USDEC, the USTR announced Dec. 9 it would initiate official consultations with Canada on its failure to fully implement provisions of USMCA dairy tariff rate quotas. The consultations are the first official step to try to resolve unwarranted restrictions Canada is using to administer its dairy TRQs established by the new Agreement. As USTR noted in its announcement, Canada’s dairy TRQ allocation measures appear to violate several provisions of the USMCA, including its mechanism to set aside and reserve a portion of the quota to processors. USTR also stated that Canada is not providing “fair” and “equitable” procedures and methods for administering its TRQs.
Unless a mutually agreeable solution can be found with Canada through the consultation process, the next step in addressing Canada’s disregard for its USMCA commitments would be for the U.S. to initiate USMCA’s formal dispute settlement procedures. A dispute settlement case could take a year or more to run its course, making it all the more important to proceed swiftly at this early stage.
The USTR decision came after months of groundwork by NMPF, working closely together with the U.S. Dairy Export Council, with both the administration and Congress. NMPF will continue its work, as further enforcement may be necessary to effectively address Canada’s unfair dairy policies.