United State Trade Representative Katherine Tai announced that the United States has prevailed in its first trade dispute settlement under the United States-Mexico-Canada Agreement (USMCA). A USMCA panel agreed that Canada is breaching its commitments to the agreement by “reserving most of the in-quota quantity in its dairy tariff-rate quotas (TRQs) for the exclusive use of Canadian processors,” according to a statement by the Office of the U.S. Trade Representative.
“This ruling is a big step for the U.S. dairy sector towards realizing the full benefits of the USMCA and securing real access to the Canadian market for additional high-quality American dairy products such as milk, cheese and skim milk powder,” said U.S. Secretary of Agriculture Tom Vilsack. “In order for trade deals to be effective and have the trust of the American people, they must be enforced. Today’s action reflects the Biden-Harris Administration’s deep commitment to enforcing the USMCA and to ensuring that trade rules work for American farmers, ranchers and producers. It also signals to our trading partners that that the United States will stand firm against unjustified trade restrictions and continue fighting on behalf of our farmers and workers to ensure that we have full and fair access to foreign markets.”
Under USMCA rules, Canada has 45 days from the date of the final report to comply with the Panel’s findings. From January through October 2021, the United States exported $478 million of dairy products to Canada, which is the third largest export destination for U.S. dairy products.