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US Threatens Mexico with USMCA Dispute Settlement, Seeks Second Dispute Proceeding with Canada

U.S. officials are threatening Mexico with a dispute settlement proceeding over its planned GMO corn ban and requesting a second dispute process with Canada over dairy under the USMCA trade pact.

USDA Secretary Tom Vilsack met with top Mexican officials recently to hear their counteroffer on banning imports of U.S. GMO corn in 2024 but warned it must comply with the USMCA.

Vilsack; “We’ve expressed in no uncertain terms that it needs to be rectified, it needs to be modified and changed, that it’s not only in the best interests of our corn growers, that it’s also, as importantly, in the best interests of the livestock industry in Mexico.”

Vilsack and U.S. Trade Ambassador Katherine Tai didn’t disclose details of Mexico’s counteroffer, but Vilsack threatened to work to trigger a USMCA dispute resolution process, a threat with support from key U.S. Senator Chuck Grassley.

Grassley; “Whatever they offer better be in conjunction and in the spirit of the USMCA, or otherwise, we shouldn’t accept it. In fact, if they don’t offer something that’s reasonable and take care of the problem that they’re going to have free trade across the border with Mexico, then we need to file our complaints.”

The U.S. is also filing a new request for dispute settlement talks with Canada after an earlier dispute panel failed to get Canada to fully fix its dairy tariff rate quota that favors Canadian processors. The National Milk Producers Federation and U.S. Dairy Export Council applaud U.S. Trade Representative Katherine Tai’s actions under USMCA regarding Canada’s dairy market.

Tai is filing a new request for dispute settlement consultations with Canada in order to expand the scope of the second USMCA dairy dispute to include additional elements necessary to ensure Canada complies with its trade agreement obligations.

“We thank USTR and USDA for their diligence in working to ensure that American dairy producers have the market access promised under USMCA,” says Jim Mulhern, president and CEO of NMPF. “Canada continues to flagrantly flout its obligations, so the U.S. government needs to be ready with retaliatory measures.”

Krysta Harden, president and CEO of USDEC, says it’s deeply unfortunate that Canada refuses to honor the full terms of the agreement. “USMCA is a fair deal that was thoroughly negotiated and agreed to by the Canadian government,” she says.

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