America is ramping up its dispute with Canada over the sale of American dairy merchandise north of the border — the primary vital new commerce squabble between the 2 international locations of the post-NAFTA period.
U.S. Commerce Consultant Katherine Tai formally requested a dispute settlement panel Tuesday to look at allegations from American producers that Canada is denying them honest entry to the Canadian market. The request marks a major escalation of American complaints about the best way Canada is allocating entry to its supply-managed dairy market underneath NAFTA’s successor, the U.S.-Mexico-Canada Settlement.
“A prime precedence for the Biden-Harris administration is absolutely imposing the USMCA and guaranteeing that it advantages American staff,” Tai stated in an announcement. “Launching the primary panel request underneath the settlement will guarantee our dairy trade and its staff can seize new alternatives underneath the USMCA to market and promote U.S. merchandise to Canadian customers.”
On the coronary heart of the dispute is how Canada has distributed its tariff-rate quotas — the portions of sure dairy merchandise, like milks, cheeses, powders, yogurt and ice cream, that may be imported at decrease obligation ranges.
U.S. commerce officers and dairy trade advocates say numerous these quotas have been allotted to processors slightly than producers, successfully denying U.S. farmers their fair proportion of the supply-managed Canadian market.
That’s expressly forbidden underneath the textual content of the settlement, USTR officers instructed a background briefing Tuesday.
“What Canada is doing is basically dividing up the (quotas) into totally different swimming pools and saying, ‘Nicely, this is a pool that solely processors can entry,”‘ stated one official, who can’t be recognized underneath the phrases of the briefing.
“We learn the settlement and we predict it is fairly plain on its face that that is not permitted. Canada disagrees and so we will argue that out earlier than a panel.”
Consultations however no decision
The 2 sides held consultations on the difficulty late final yr as a first step “however didn’t resolve the dispute,” the USTR stated in a information launch Tuesday.
Canadian officers have been insisting for months that the allocations are completely consistent with Canada’s commitments underneath the commerce settlement, which took impact final July.
Worldwide Commerce Minister Mary Ng stated Canada is “disillusioned” with the USTR’s choice and that the quota allocations are properly inside the bounds of the settlement, recognized north of the border as CUSMA or the “new NAFTA.”
“Beneath CUSMA, Canada agreed to supply some extra market entry to the USA for dairy whereas efficiently defending our provide administration system and dairy trade,” Ng stated in an announcement.
“We’re assured that our insurance policies are in full compliance with our CUSMA TRQ obligations, and we are going to vigorously defend our place in the course of the dispute settlement course of.”
The request for a panel places dairy squarely alongside the continued softwood lumber dispute as two of essentially the most outstanding trade-related sore spots within the Canada-U.S. relationship. However even wholesome relationships have disagreements, Prime Minister Justin Trudeau stated earlier Tuesday.
“We are going to all the time defend provide administration and our dairy producers, amongst others. We are going to all the time arise for our forestry staff within the trade throughout the nation,” Trudeau stated.
“We are going to proceed — as we did efficiently within the earlier administration — to face as much as defend Canadian pursuits and values wherever needed.”