Several dairy groups are dismayed that the United States-Mexico-Canada Agreement (USMCA) dispute panel is enabling Canada to limit the dairy access that the US bargained for in the deal, undermining the agreement’s worth to the US dairy sector.
“It is profoundly disappointing that the dispute settlement panel has ruled in favor of trade obstruction rather than trade facilitation,” said Jim Mulhern, president and CEO of NMPF, in a press statement.
In January 2022, a previous tribunal decided that Canada had unfairly blocked access to its market for US dairy goods. In response, Canada made inadequate reforms to its dairy tariff rate quota (TRQ) system, resulting in a result that fell well short of the market access sought by the United States under the USMCA. To overcome this deficiency, the United States filed a second lawsuit to oppose Canada’s reforms. The three-member tribunal constituted under the USMCA verdict last week determined that Canada had not behaved unreasonablely.
“Despite this independent panel’s negative ruling, we’d like to thank the Biden Administration and the many members of Congress who backed us up in our tireless pursuit of justice for America’s dairy industry.” “We urge Ambassador Tai and Secretary Vilsack to consider all available options to ensure that Canada stops playing games and follows through on what was agreed upon,” Mulhern said.
“Despite the conclusions of this report, the United States continues to have serious concerns about how Canada is implementing the dairy market access commitments it made in the agreement,” said U.S. Trade Representative Katherine Tai in a statement.
Edge Dairy Farmer Cooperative, one of the country’s major dairy cooperatives, also voiced dissatisfaction with the decision of a dispute resolution body formed under the US-Mexico-Canada Agreement. U.S.
“The dairy industry in the United States was optimistic that the USMCA would bring new opportunities, but both parties must follow the rules.” We are upset by the decision, but we do not consider this matter to be resolved. “US trade officials must continue to find ways to uphold Canada’s — and all US trade partners’ — commitments under trade agreements,” Edge Dairy President Brody Stapel said. “The USMCA promised opportunity for American dairy farmers, with an estimated 50% increase in export value each year.” Unfortunately, high-quality dairy product producers are still unable to get their product onto Canadian grocery store shelves. Edge is committed to assisting US trade authorities in charting a course forward on this problem.”
“We will continue to work to address this issue with Canada, and we will not hesitate to use all available tools to enforce our trade agreements and ensure that U.S. workers, farmers, manufacturers and exporters receive the full benefits of the USMCA,” he added.
According to dairy industry organizations in the United States, Friday’s declaration was a severe setback.
“This ruling has unfortunately set a dangerous and damaging precedent,” said Krysta Harden, president and CEO of the United States Dairy Export Council.
More than a quarter-century ago, the North American Free commerce Agreement altered the terms of commerce between the three nations. Mexico’s borders have largely been opened to free commerce, resulting in a flood of imports, especially from the United States. Canada, on the other hand, has shielded its markets from US milk supply, which vastly outnumbers what Canadian farmers produce.
