The United States has decided to create a dispute settlement panel to examine Canada’s milk quotas, which Washington says undermines the ability of American dairy exporters to sell a wide range of products to Canadian consumers.
The United States is challenging Canada’s tariff rate quotas, or TRQs, which apply a preferential rate of duty to a certain quantity of imports and a different rate to imports greater than that quantity.
Specifically, the United States questions setting aside a percentage of each dairy quota exclusively for Canadian processors, and the United States has requested a panel under the United States-Mexico Agreement. Canada to review the measures, the Office of the US Trade Representative said. in a statement Tuesday.
“These measures negate the ability of US dairy farmers, workers, and exporters to use TRQs and take full advantage of the USMCA,” the USTR said. “The launch of the first panel request under the agreement will allow our dairy industry and its workers to seize new opportunities under USMCA to market and sell US products to Canadian consumers.
The US dairy industry has long pushed for greater accountability from its northern neighbor, part of the momentum to include dairy policy in the July pact that replaced the North American Free Trade Agreement. Under the USMCA, Canada has the right to maintain 14 tariff rate quotas on dairy products, including milk, cream and yogurt.
Canadian Trade Minister Mary Ng said the nation was “disappointed” with the United States’ request to create a panel for the disputes.
“As part of CUSMA, Canada has agreed to provide additional market access to the United States for dairy products while successfully defending our supply management system and the dairy industry,” a- she said in a statement, using the acronym of Canada for the trade pact. “We are confident that our policies are fully in line with our CT CUSMA obligations, and we will vigorously defend our position during the dispute resolution process.”
Canada’s dairy industry has said its quotas are in line with the trade deal and the government has a strong case to present to the group, said Pierre Lampron, president of Dairy Farmers of Canada.
The Dairy Processors Association of Canada is confident that its policies are fully in line with its obligations and is ready to support the Canadian government in defending its position, she said in an email.
The United States challenged the quota for the first time in December. Washington has held consultations with Ottawa, but the parties have been unable to resolve their concerns through this approach, a USTR official said on a call with reporters. A panel selection process will take about a month, and a report should be ready later this year, the USTR said.
The U.S. Department of Commerce’s International Trade Commission conducted an initial analysis of the cost of tariff rate quotas to the U.S. dairy industry, but the USTR did not disclose the figure, saying it would be under discussion during the implementation phases. implement arbitration, if the United States be successful.
The deal provides for the possibility of tariffs as a form of retaliation, but “we’re a long way from that process,” the USTR official said.
Last week, the United States Department of Commerce issued new preliminary rulings on anti-dumping tariffs on imports of Canadian softwood lumber that would double current duties if implemented.
Canadian Prime Minister Justin Trudeau was asked about these trade tensions in the lumber and dairy sector earlier Tuesday at a press conference in Ottawa.
“We will always stand up for our forestry workers and industry across the country. We will continue – as we successfully did under the previous administration – to defend Canadian interests and values wherever necessary and will continue, ”Trudeau said.
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