A three-member disputes-settling panel has ruled that Canada cheated on the way it controls dairy imports from the United States under the Canada-United States- Mexico free trade agreement.
One of the judges said it’s not fair that Canadian processors get to decide who holds import permits for American dairy products. The permits are highly lucrative, enabling the holder to import dairy products at low prices and well them to Canadians at the much higher prevailing Canadian market prices.
The panelist noted that processors are competitors with American exporters, not people eager to serve demand from retailers and consumers.
Of course anybody could see that the import permits ought to have gone to those who genuinely want to serve the Canadian public, not to protect their markets. And this should also apply to import permits for dairy products imported from the European Union and members of the Trans-Pacific Partnership.
Canadian farmers and processors have no basis for complaining about these imports because they are garnering hundreds of millions of taxpayer dollars as compensation for yielding some of the Canadian market to imports.
The three-member panel — made up of a Uruguayan diplomat who was once ambassador to Canada, a Canadian trade lawyer based in the U.S., and a U.S. trade lawyer named to the panel by Canada — agreed that Canada violated its promise to cede about three per cent of the Canadian market by imposing unfairly complicated rules.
The U.S. says Canada now has to comply with the ruling or face the possibility of a trade penalty such as a tariff.
Canada has until Feb. 3 to respond.
