The Trump administration has filed its first dispute under the United States-Mexico-Canada Agreement (USMC), claiming that Canada is improperly restricting access to its dairy market. .On December 9, US Trade Representative Robert Lighthizer requested formal consultation with Canadian trade officials to discuss Canadas’ administration of its tariff-rate quotas (TRQs) on a range of dairy products, including; milk, cream, skim milk powder, butter and cream powder, cheeses, condensed milk, yogurt and buttermilk, and powdered buttermilk..Under USMCA Chapter 31 – Dispute Settlement, Article 31.4: Consultations, 5 – Unless the consulting Parties decide otherwise, they shall enter into consultations no later than: (a) 15 days after the date of delivery of the request for a matter concerning perishable goods; or, (b) 30 days after the date of delivery of the request for all other matters. .USMCA further states: “The consulting Parties shall make every attempt to arrive at a mutually satisfactory resolution of a matter through consultations under this Article or other consultative provisions of this Agreement.”.President Donald Trump has been having a cow over the Canada–US dairy trade for several years. .In 2017, he called the dairy trade a “disgrace”; “What they’ve done to our dairy-farm workers is a disgrace. It’s a disgrace… our famers in Wisconsin and New York State are being put out of business, our dairy farmers. The fact is NAFTA, whether it’s Mexico or Canada, is a disaster for our country. It’s a disaster. It’s a trading disaster.”.“Canada’s measures violate its commitments and harm U.S. dairy farmers and producers,” Lighthizer stated in the official Office of the United States Trade Representative press release..“President Trump successfully renegotiated the USMCA to replace the failed NAFTA, and a key improvement was to give U.S. dairy producers fairer access to Canada’s highly protected dairy market. Canada’s measures violate its commitments and harm U.S dairy farmers and producers,” said Lighthizer..“We are disappointed that Canada’s policies have made this first ever enforcement action under the USMCA necessary to ensure compliance with the agreement. This action demonstrates that the United States will not hesitate to use all tools available to guarantee American workers, farmers, ranchers, and businesses enjoy the benefits we bargained for.”.At issue is the distribution of Canadian tariff-rate quotas — the quantities of various dairy products — that can be imported at lower duty levels. .A large share of those quotas have been allocated to processors, rather than producers – effectively denying U.S. farmers their fair share of the supply-managed Canadian market, according to the US..“In notices to importers that Canada published in June and October for dairy TRQs, Canada sets aside and reserves a percentage of the quota for processors and for so-called “further processors”, contrary to Canada’s USMCA commitments. This restriction undermines the value of Canada’s TRQs for U.S. producers and exporters by limiting their access to in-quota quantities negotiated under the USMCA”, the press release said. .Canada disagrees..“Canada’s administration of its dairy TRQs is in full compliance with its commitments under the new NAFTA”, said Youmy Han, a spokesperson for International Trade Minister Mary Ng. .Ken Grafton is the Western Standards Ottawa Bureau Chief. He can be reached at kgrafton@westernstandardonline.com
The Trump administration has filed its first dispute under the United States-Mexico-Canada Agreement (USMC), claiming that Canada is improperly restricting access to its dairy market. .On December 9, US Trade Representative Robert Lighthizer requested formal consultation with Canadian trade officials to discuss Canadas’ administration of its tariff-rate quotas (TRQs) on a range of dairy products, including; milk, cream, skim milk powder, butter and cream powder, cheeses, condensed milk, yogurt and buttermilk, and powdered buttermilk..Under USMCA Chapter 31 – Dispute Settlement, Article 31.4: Consultations, 5 – Unless the consulting Parties decide otherwise, they shall enter into consultations no later than: (a) 15 days after the date of delivery of the request for a matter concerning perishable goods; or, (b) 30 days after the date of delivery of the request for all other matters. .USMCA further states: “The consulting Parties shall make every attempt to arrive at a mutually satisfactory resolution of a matter through consultations under this Article or other consultative provisions of this Agreement.”.President Donald Trump has been having a cow over the Canada–US dairy trade for several years. .In 2017, he called the dairy trade a “disgrace”; “What they’ve done to our dairy-farm workers is a disgrace. It’s a disgrace… our famers in Wisconsin and New York State are being put out of business, our dairy farmers. The fact is NAFTA, whether it’s Mexico or Canada, is a disaster for our country. It’s a disaster. It’s a trading disaster.”.“Canada’s measures violate its commitments and harm U.S. dairy farmers and producers,” Lighthizer stated in the official Office of the United States Trade Representative press release..“President Trump successfully renegotiated the USMCA to replace the failed NAFTA, and a key improvement was to give U.S. dairy producers fairer access to Canada’s highly protected dairy market. Canada’s measures violate its commitments and harm U.S dairy farmers and producers,” said Lighthizer..“We are disappointed that Canada’s policies have made this first ever enforcement action under the USMCA necessary to ensure compliance with the agreement. This action demonstrates that the United States will not hesitate to use all tools available to guarantee American workers, farmers, ranchers, and businesses enjoy the benefits we bargained for.”.At issue is the distribution of Canadian tariff-rate quotas — the quantities of various dairy products — that can be imported at lower duty levels. .A large share of those quotas have been allocated to processors, rather than producers – effectively denying U.S. farmers their fair share of the supply-managed Canadian market, according to the US..“In notices to importers that Canada published in June and October for dairy TRQs, Canada sets aside and reserves a percentage of the quota for processors and for so-called “further processors”, contrary to Canada’s USMCA commitments. This restriction undermines the value of Canada’s TRQs for U.S. producers and exporters by limiting their access to in-quota quantities negotiated under the USMCA”, the press release said. .Canada disagrees..“Canada’s administration of its dairy TRQs is in full compliance with its commitments under the new NAFTA”, said Youmy Han, a spokesperson for International Trade Minister Mary Ng. .Ken Grafton is the Western Standards Ottawa Bureau Chief. He can be reached at kgrafton@westernstandardonline.com
