In the first dispute panel decision under the new Canada-United States-Mexico Agreement (CUSMA), the Canadian government was instructed to change how it allocated its dairy tariff rate quotas, as the U.S. argued its dairy industry was not given the access it was promised.
Both the Americans and Canadians claimed victory in the dispute panel decision, but Canada still must comply with the ruling.
The National Milk Producers Federation’s senior vice president, trade policy, Jaime Castaneda, confirms that Canada has submitted its solution to the American side prior to the February 4th implementation deadline. However, details of the solution have been kept confidential so far.
RealAgriculture has spoken with both Agriculture and Agri-Food Canada (AAFC) and International Trade, Export Promotion, Small Business and Economic Development, and neither department would confirm delivery or details of the solution provided to the United States’ Trade Representative, as of early February 4.
“We are confident we will be able to meet the findings of the panel, and we continue to work closely with industry and partners to reach a solution. We are actively working with the United States to resolve this. We are working to get this right,” said an AAFC spokesperson.
There were four complaints addressed by the USMCA dispute panel in the January finding. The panel’s decision includes the statement that reserving access of 85 to 100 per cent of 14 separate TRQs is “inconsistent with Article 3.A.2.11 (b),” ruling that this constitutes limiting to processors, which is not allowed under the agreement.
There are trade analysts and experts following this panel decision very closely and wondering how it may impact Canada’s TRQ allocations within the CPTPP trade deal in the long term, with dairy exporting powerhouse New Zealand watching closely.
Both the Canadian and U.S. governments must agree on the TRQ changes.