U.S. Trade Representative Katherine Tai this week established the second U.S.-Mexico-Canada Agreement dispute panel regarding access to Canada?s dairy market. Dave Salmonsen, American Farm Bureau Federation Senior Government Affairs Director, said the case stems from Canada?s application of tariff rate quotas for dairy products.
?USTR is saying that these actions by Canada have not followed the initial decision in a case that was won by the U.S. in December of 2021 to try to enforce the measures and the U.S.-Mexico-Canada agreement that granted increased access into the Canadian market for U.S. dairy producers,? Salmonsen said. ?So, this is a follow up to that initial decision.?
Salmonsen explained that TRQs allow a country to export products without facing a full tariff.
?These are measures put in trade agreements where a country says we’ll allow a certain amount of product in, but we won’t apply our full tariff,? Salmonsen said. ?And this was negotiated in the US-Mexico-Canada Agreement, and the U.S. is saying that our dairy producers have not gotten that access, Canada has not followed the agreements that they made in the USMCA.?
The process will likely take six to eight months. Salmonsen said a positive outcome for the U.S. would boost dairy exports to Canada.
?If U.S. wins the case again and Canada actually implements the regulations the way the agreement says they should, it would add about over $250 million or more worth of U.S. dairy products going into Canada,? Salmonsen said. ?Currently we export about 550 to $600 million of dairy products to Canada, so this will be a significant increase, and would set the stage for further growth.?
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