USMCA panel sides with Canada on dairy dispute

U.S. officials say they’re very disappointed after a trade dispute panel ruled in favor of Canada regarding dairy market access.

Shawna Morris with National Milk Producers Federation and the U.S. Dairy Export Council tells Brownfield, “Frankly, we’re floored and extremely disappointed with this panel. It’s still hard to imagine how the panel concluded what they did.”

Morris says they supported a second dispute panel to get real reforms so U.S. producers would get the Canadian market access promised in the USMCA trade agreement but, “The panel has concluded that Canada apparently has a wildly free hand in how it can actually shape it’s market access committments in ways that frankly, we don’t think are consistent with the text of the agreement.”

The ruling issued by the USMCA trade dispute panel Friday allows Canada to continue to restrict its annual dairy tariff rate quotas, or TRQ’s by reserving a percentage of the quota for processors and for so-called “further processors.” 

The ruling brought immediate criticism from U.S. dairy groups and members of Congress.  Jim Mulhern with the National Milk Producers Federation says the outcome fell far short of the market access the U.S. expected to receive under USMCA.  He says, “It is profoundly disappointing that the dispute settlement panel has ruled in favor of obstruction of trade rather than trade facilitation.  Despite this independent panel’s adverse ruling, we’d like to thank the Biden Administration and the many members of Congress who supported us for their tireless pursuit of justice for America’s dairy sector. We urge Ambassador Tai and Secretary Vilsack to look at all available options to ensure that Canada stops playing games and respects what was negotiated.”

The House Ag Committee’s Chair and Ranking Member Glenn GT Thompson and David Scott released a joint statement saying, “We are disappointed in today’s announcement and the decision of the dispute panel. It is critical the U.S. encourage and enforce USMCA, and this decision allows Canada to continue their questionable protectionist practices that disallow fair access to Canadian markets. We appreciate Ambassador Tai and the Biden Administration’s continued pursuit to ensure fair market access for U.S. dairy producers.”

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