In a move to protect dairy farmers, the U.S. government this week filed its first-ever enforcement action under the United States-Mexico-Canada Agreement seeking to ensure access to Canadian markets for farmers.
U.S. Trade Representative Robert E. Lighthizer announced Wednesday that he is seeking a consultation with Canadian officials to discuss measures through which Canada allocates its dairy tariff-rate quotas (TRQs) under the USMCA. TRQs are designed to provide U.S. dairy producers with greater access to Canada’s dairy market.
In a prepared statement, Mr. Lighthizer said that by setting aside and reserving a percentage of each dairy TRQ exclusively for processors, Canada has “undermined the ability of American dairy farmers and producers to utilize the agreed-upon TRQs and sell a wide range of dairy products to Canadian consumers.”
“Canada’s measures violate its commitments and harm U.S. dairy farmers and producers,” Mr. Lighthizer said. “We are disappointed that Canada’s policies have made this first ever enforcement action under the USMCA necessary to ensure compliance with the agreement.”
Canada’s dairy TRQ allocation measures set limits on the quantity of certain dairy products, including butter, all cheeses, milk and others, that may be imported at a lower rate of duty. Under USMCA, Canada has a right to maintain 14 TRQs on dairy products.
According Mr. Lighthizer, in notices to importers that Canada published in June and October for dairy TRQs, the country set aside and reserved a percentage of the quota for processors and “further processors,” which he contends undermine the value of Canada’s TRQs for U.S. producers and exporters by limiting their access to in-quota quantities negotiated under the USMCA.
In a joint statement, U.S. Sens. Charles E. Schumer and Kirsten Gillibrand “applauded” Mr. Lighthizer’s enforcement action.
“New York’s dairy industry must have Canada fully abide by its USMCA dairy pricing and export policy commitments,” the senators said. “We must continue to hold Canada and our other trading partners accountable and ensure equitable trading practices to help New York’s dairy farmers churn up profits that mitigate the huge losses they have suffered this year.”