U.S. Trade Representative Katherine Tai announced Tuesday that the U.S. is calling for a second dispute panel under the U.S.-Mexico-Canada Agreement to rule on its claims that Canada is unfairly manipulating dairy quotas, cutting U.S. access to key parts of the Canadian market.
The U.S., despite already winning a dispute panel ruling, argues Canada did not respond with adequate changes that would comply with the country’s commitments under USMCA.
“With this panel request, we are utilizing our available tools to enforce our trade agreements and ensure that U.S. workers, farmers, processors, and exporters receive the full benefits of the USMCA,” Tai said in a statement.
Canada, through its tariff rate quotas, has effectively stopped Canadian retailers and food service operations from accessing the quotas and buying U.S. dairy goods, according to the Office of the USTR.
“Canada is a valued and important trading partner, but they continue to fall short of their USMCA obligations by denying U.S. dairy producers and exporters fair access to the Canadian market,” said Ag Secretary Tom Vilsack. “This panel request is necessary to ensure Canada honors their commitments as they relate to dairy, and so American producers have greater export opportunities as intended.”
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The Tuesday announcement comes just a day after three U.S. senators released copies of letters to the USTR that demand another dispute settlement panel over Canada’s dairy quotas.
“The January 2022 dispute settlement panel’s ruling in favor of the U.S. should have resulted in the necessary improvements for American dairy access in Canada,” Senate Ag Appropriations Subcommittee Chair Tammy Baldwin, D-Wis., said in one of the letters. “However, Canada has so far failed to make the changes required by the panel. This precedent raises broader concerns about the anticipated effectiveness of the dispute settlement mechanism overall — with implications beyond this specific dairy issue.”
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