The United States has requested and established a dispute settlement panel to review measures regarding Canada’s administration of its dairy tariff rate quota (TRQs) policies, under the new trade agreement USMCA/CUSMA.

The U.S. is challenging Canada’s allocation of dairy TRQs — specifically the set-aside of a percentage of each dairy TRQ exclusively for Canadian processors. The country is saying these measures deny the ability of U.S. dairy farmers, workers, and exporters to utilize the TRQs and realize the full benefit of the USMCA.

Mary Ng, Canada’s Minister of Small Business, Export Promotion and International Trade, says that Canada if confident that its policies are in full compliance with the USMCA TRQ obligations.

“Canada is a strong proponent of rules-based multilateral trade and believes that international trade will play an important role in the global recovery from COVID-19,” says Minister Ng. “We take our obligations under international agreements seriously. This includes those under USMCA with the United States, our closest trading partner. We are confident that our policies are in full compliance with our USMCA TRQ obligations, and we will vigorously defend our position during the dispute settlement process.”

The U.S. requested consultations with Canada on December 9, 2020. The Parties held consultations on December 21, 2020, but did not resolve the dispute. This is the first panel request ever filed under Chapter 31 (Dispute Settlement) of the USMCA.

The dispute settlement process could take up to 8 months to conclude, in this case, up to December 2021.

 

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