US Establishes Second Dispute Panel Over Canadian Dairy Quotas Under Trade Agreement
Introduction
The United States has set up a second dispute-settlement panel to resolve differences with Canada over its dairy quotas, stating that Ottawa is still undermining access to its market under the trade deal between the nations. This move comes after Canada changed its quota allocations in December 2021, following a panel finding that its measures were inconsistent with its obligations under the pact.
Background
The dispute centers around Canada’s allocation of duty-free or lower tariff access across dairy products, including milk, cream, cheese, yogurt, and ice cream. Under the USMCA (United States-Mexico-Canada Agreement) that took effect in July 2020, Canada conceded to granting more duty-free or lower tariff access to these products via a tariff-rate quota, or TRQ. However, Canada has been allocating the bulk of those imports to processors, limiting the ability of other groups like retailers to buy U.S. product.
Statement from USTR Katherine Tai
While Canada’s new policies were intended to address the issue, U.S. Trade Representative Katherine Tai stated that they "have not fixed the problem." This statement highlights the ongoing concerns of the United States regarding Canada’s practices and its commitment to fulfilling its obligations under the USMCA.
Response from Canadian Trade Minister Mary Ng
Canada has expressed disappointment with the U.S. request for another panel, stating that it will continue to defend its supply-management system and market access. Trade Minister Mary Ng emphasized that Canada will stand firm against attempts to re-negotiate during this dispute-settlement-panel process.
Statement from Agriculture Secretary Tom Vilsack
Agriculture Secretary Tom Vilsack stated that the panel request is necessary to ensure Canada honors its commitments as they relate to dairy and provides fair access to the Canadian market for U.S. dairy producers and exporters. He emphasized that American producers have greater export opportunities as intended under the USMCA.
Panel Expectations
The three-member panel is expected to issue a report later this year, providing further insight into Canada’s practices and its compliance with the USMCA obligations. This decision highlights the ongoing efforts of the United States to ensure fair access to the Canadian market for U.S. dairy producers and exporters.
Implications and Consequences
The dispute between the United States and Canada over dairy quotas has significant implications for trade relations between the two countries. The establishment of a second dispute-settlement panel underscores the complexity of this issue and the ongoing efforts of both nations to resolve their differences. As the panel’s report is expected later this year, the outcome will likely have far-reaching consequences for trade relations between the United States and Canada.
Conclusion
The U.S. decision to set up a second dispute-settlement panel on Canadian dairy quotas under the USMCA reflects the ongoing concerns of the United States regarding Canada’s practices and its commitment to fulfilling its obligations under the agreement. The establishment of this panel highlights the complexity of trade relations between nations and underscores the importance of fair access to markets for U.S. dairy producers and exporters.
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