USTR takes action against Canada for ‘undermining US dairy farmers’

By Jim Cornall contact

- Last updated on GMT

If the US and Canada cannot resolve US concerns through consultations, the US may request the establishment of a USMCA dispute settlement panel. Pic: Getty Images/Lemaniah
If the US and Canada cannot resolve US concerns through consultations, the US may request the establishment of a USMCA dispute settlement panel. Pic: Getty Images/Lemaniah

Related tags: nmpf, USDEC, USMCA, Canada, Dairy

The U.S. Dairy Export Council (USDEC), the National Milk Producers Federation (NMPF), and Edge Dairy Farmer Cooperative have all supported the announcement that the U.S. Trade Representative (USTR) will initiate official consultations with Canada to examine the administration of its dairy Tariff Rate Quota (TRQ) obligations.

The USTR said by setting aside and reserving a percentage of each dairy TRQ exclusively for processors, “Canada has undermined the ability of American dairy farmers and producers to utilize the agreed-upon TRQs and sell a wide range of dairy products to Canadian consumers.”​   

United States Trade Representative Robert E. Lighthizer said, “Canada’s measures violate its commitments and harm US dairy farmers and producers.  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.”

Supporting the move, Tom Vilsack, president and CEO of USDEC, said, “We knew from day one that enforcement would be key to bringing the intended benefits home to America’s dairy industry. I applaud USTR for hearing our concerns and relying on our guidance to take this critical enforcement step to ensure that the agreement is executed in both letter and spirit. This is the critical first step, but more work may be needed to ensure Canada complies with its Class 7 related USMCA commitments as well.”

Even prior to its entry into force, USDEC and NMPF monitored Canada’s actions regarding its USMCA commitments and urged Congress and the administration to make this a priority as soon as USMCA entered into force.

USDEC and NMPF allege Canada has distorted its TRQ administration to limit imports from the US.

Earlier this year, USDEC and NMPF highlighted for USTR and the U.S. Department of Agriculture (USDA) what it said are the inconsistencies between Canada’s dairy TRQ allocations and Canada’s USMCA obligations. In a detailed filing submitted to the administration, NMPF and USDEC provided the agencies with a specific legal review of the Canadian TRQ system and an explanation of the negative impacts resulting from them.

“America’s dairy farmers appreciate USTR’s commitment to the fair and transparent enforcement of USMCA,”​ said Jim Mulhern, president and CEO of NMPF.

“Enforcement has been one of the top priorities of our industry since the final agreement was announced, and we’ve worked diligently to ensure that it remains one of USTR’s top priorities, as well. Only when Canada is held fully accountable to its trade commitments will America’s dairy farmers be able to realize the full benefit of the provisions that the US government worked so hard to secure.

“We look forward to working closely with the incoming administration as well since enforcement efforts are likely to require sustained focus going forward.”

In August, 104 Representatives sent a letter to USTR and USDA asking for Canada to be held accountable to its trade promises while a letter in the Senate was signed by 25 Senators.

Edge Dairy Farmer Cooperative, one of the largest dairy co-ops in the country, also supported the USTR move.

Edge president Brody Stapel said the announcement, “shows that the USTR office is ensuring that our dairy farmers and processors realize the additional market access of the newly minted USMCA trade agreement. On behalf of our dairy farmers, Edge appreciates USTR’s commitment to hold Canada to the agreement as intended and negotiated.”

The USTR said if the US and Canada cannot resolve US concerns through consultations, the US may request the establishment of a USMCA dispute settlement panel to examine the situation.

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