In a situation that could directly affect area dairy farmers in Otter Tail County, early last month, Global Affairs Canada released their proposed changes to their tariff-rate-quota (TRQ) allocations in regards to the the United States-Mexico-Canada Agreement (USMCA) officially entered into force on July 1, 2020.
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Early last month, Global Affairs Canada released their proposed changes to their TRQ allocations. Unfortunately, the proposal fails to provide Minnesota dairy producers with the market access negotiated under USMCA.

A bipartisan group from the Minnesota delegation of senators and representatives including Rep. Michelle Fischbach has expressed concern about the situation in a letter that they wrote.

According to the National Milk Producers Federation (NMPF) on Mar. 2, their organization along with the U.S. Dairy Export Council (USDEC) rejected a proposal issued by Global Affairs Canada that outlines the Canadian changes to their current scheme for allocating U.S.-Mexico-Canada Agreement (USMCA) dairy tariff-rate-quotas TRQ.

NMPF also stated in a release that, “As the first case brought and decided under USMCA, the U.S.-Canada dairy TRQ panel is a test-case for whether or not the USMCA dispute settlement process can provide effective enforcement and deliver genuine compliance with the agreement. NMPF and USDEC will continue to work with the Biden administration and Congress to ensure that the process provides the type of strong precedent needed for future USMCA disputes as well.”

It also states that under the USMCA, Canada has agreed to TRQs on 14 different categories of dairy products. The tariff rate applied to products included in the 14 categories of TRQs is zero. These 14 TRQs represent an additional $270 million in exports over previous TRQs created under the North American Free Trade Agreement (NAFTA).

Fischbach said it is imperative that the latest TRQ proposal be rejected.

“The USMCA is a strong agreement, but it will only work if the agreements within it are adhered to and respected,” said Rep. Fischbach. “I am proud to join my Minnesota colleagues in urging USTR to reject the latest TRQ proposal from Canada and continue pressing for the full measure of access to the Canadian dairy market that was agreed to under USMCA.”

Last year, the United States Trade Representative (USTR) successfully utilized the United States-Mexico-Canada Agreement’s (USMCA) dispute panel to rule that Global Affairs Canada was breaching its commitments to American agriculture.

NMPF also stated in a release that, “As the first case brought and decided under USMCA, the U.S.-Canada dairy TRQ panel is a test-case for whether or not the USMCA dispute settlement process can provide effective enforcement and deliver genuine compliance with the agreement. NMPF and USDEC will continue to work with the Biden administration and Congress to seek to ensure that the process provides the type of strong precedent needed for future USMCA disputes as well.”

AUSTRALIA – The government of Australia has awarded funds to two local dairy companies, Purearth and Australian Consolidated Milk, in an effort to boost local milk production.

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