If not resolved, the U.S. could file for resolution via a disputes-settlng panel.
The complaint is similar to previous ones about the way Canada is administering imports that don’t pay the full Canadian tariff rates.
The U.S. is complaining that Canada gave most of the import rights – administered by quotas – to dairy-processing companies which, it argues, want to preserve Canadian markets for themselves. It wants more of the import permits, which are rationed out to keep imports within the agreed-upon quotas, to be spread around to, for example, retailers and foodservice companies.
Canadian Trade Minister Mary Ng said previous dispute settlement panels “have repeatedly confirmed that our supply management system is in line with our international trade obligations” and that the CUSMA terms surrounding import tariffs are being upheld.
In response, Canada's trade minister Ng said “we look forward to demonstrating how Canada is meeting its CUSMA obligations during the new consultations on allocations of dairy tariff-rate quotas.”
“As we have always done, and we will continue to do, we will stand up, work with, and defend our dairy farmers and workers.” she said.
A tribunal ruled in December that Canada violated the terms of CUSMA by setting aside the vast majority of low-tariff imports from the U.S. exclusively for use by Canadian dairy processors. The final report, released in early January, said Canada’s practices were “inconsistent” with the trade deal.
Yet the decision prompted both countries to declare victory, with Ng saying the ruling was “overwhelmingly in favour” of Canada’s dairy industry.
Over the latter months of 2020 when the quotas first came into effect, the U.S. dairy industry found it was unable to fill them because permit holders were not importing as much as the permits allow. That prompted the first formal complaint which went to a disputes-settling panel which ordered Canada to make changes.
Canadian officials did make changes, but not enough to satisfy the U.S. which filed a second complaint in May which is likely to head to another disputes-settling panel.
And now there’s this third request for negotiations which expands the complaints filed in May.
