Thursday, May 19, 2022

U.S. emphatically rejects Canada’s dairy trade response

The United States has emphatically rejected Canada’s response to its loss of a trade dispute over how it handles import controls for dairy products.

A disputes-settling panel under the trade agreement among Mexico, Canada and the United States, ruled that Canada is wrong to assign import permits to milk processing companies. The U.S. wants them assigned to those who buy dairy products from processors, such as wholesalers and retailers.

But Canada’s International Trade Minister Mary Ng said that under the trade agreement, Canada has the authority to manage imports within a tariff-rate quota. 

The quotas establish how much of each dairy product can enter Canada at reduced tariffs. The trade agreement substantially increased the quotas, prompting the Canadian government to offer dairy farmers and processors subsidies of hundreds of millions of dollars.

“The new policies end the use of processor-specific TRQ pools,” Ng said.

“We will always stand up for its dairy industry, farmers and workers and the communities they support, and at a time when global food security is under threat, it is even more important that we strengthen and maintain a strong and vibrant domestic dairy industry,” Ng said.

In a call to reporters from Poland after meeting with G7 leaders about the Ukraine situation, United States Secretary of Agriculture Tom Vilsack said he had had a “very frank and specific conversation” with Canadian Agriculture Minister Marie-Claude Bibeau to tell her “how inadequate” the response was, and that the United States was “greatly disappointed” that the new quotas do not include retailers.

“I am hopeful that the nature of my conversation with the Canadian minister underscores the initial level of disappointment,” Vilsack said, adding that he believes Bibeau “is capable of reading between the lines about what’s next.”

International Dairy Foods Association president and chief executive officer Michael Dykes, who represents dairy processors, said “this outcome is completely unacceptable.”

“Canada’s publication today clearly shows they are ignoring their trade commitments agreed to in the USMCA and refusing to administer their dairy TRQs in a manner compliant with the agreement, he said.