WASHINGTON, July 21, 2023—The governments of the United States and Canada yesterday concluded an oral hearing on the dispute between the two countries related to Canada’s unwillingness to administer dairy tariff-rate quotas (TRQs) in compliance with the country’s obligations under the U.S.-Mexico-Canada Agreement (USMCA). IDFA Vice President of Trade Policy and International Affairs Becky Rasdall issued the following quote applauding the work of the U.S. Trade Representative to bring Canada into compliance with USMCA:
“IDFA is very grateful to the entire U.S. government team for initiating and leading this second enforcement action against Canada, the resolution of which is a critically important matter for U.S. dairy producers and processors. IDFA has worked intensively over the past year to support the U.S. government’s preparation for this week’s hearing and for the subsequent panel report. We are grateful to the U.S. government team for their efforts, and we look forward to supporting them throughout the remainder of this dispute settlement process.
“The two days of hearings marked a new phase in the dispute process, in which each government had the opportunity to interact more directly with the panelists who will adjudicate the dispute and answer any final questions before the panelists issue their findings in the form of a report. IDFA looks forward to the issuance of this report—one that should allow for U.S. exporters to realize the promise of USMCA and maintain a rules-based trading system in North America.”
Since entry into force of USMCA in 2020, Canada has maintained a number of TRQ policies concerning to IDFA members. These include, for example, Canada’s policies to manipulate quota allocations in order to favor Canadian processors, prohibit retailers and foodservice operators from receiving quota, and require constant import activity in a manner that prevents new, small- and medium-sized importers from being able to effectively obtain quota.
The U.S. dairy industry exports approximately 18% of all milk production. As U.S. milk production continues to increase over the next decade while other dairy-producing competitors see decreasing production, the U.S. government must ensure there are functioning, efficient avenues for U.S. dairy exports to meet growing global demand in North America and around the world. IDFA supports the Biden Administration’s efforts to bring Canada’s TRQ administration into compliance with their USMCA commitments, along with their pricing policies into compliance with their WTO obligations.