The U.S. dairy industry is rising concern with Canada’s administration of TRQ’s as the official implementation of the United States, Mexico, Canada Agreement (USMCA) nears. The agreement is set to go into effect on July 1, 2020.
Jaime Castaneda, Senior Vice President for Policy, Strategy, and International Trade for the National Milk Producers Federation (NMPF), says the undermining done by Canada is nothing new to the industry. “Canada will always try to undermine any agreement that we have had, I mean they have done that since way back when we negotiated the first U.S. Canada Free Trade Agreement in 1988.”
Through the agreement, free market access is made fair by tariff-rate quotas (TRQ), which gives access to a small amount of product flow within the countries at a low or no duties. Castaneda says Canada has issued an administration of the new market access between the US and Canada.
“The way that actually the Canadians have issued this administration of the TRQ’s, is that 85% will go to processors, those that are actually competing with us to sell anything into the Canadian market at the retail or food service.”
Castaneda says the NMPF’s concern comes from Canada using this in other trade agreements such as the Trans-Pacific Partnership. He says there are provisions within USMCA to prevent this from happening again.
“So the amount of access from the total amount that was available is minimal it’s actually only about 5%, so obviously the Canadian Government is doing whatever they can to prevent from gaining the new market access that we negotiated under this agreement.”