U.S. Dairy Awaits Canada’s Response to USMCA Trade Dispute Decision

Announced earlier this week, the first trade dispute decision from the newly established U.S.-Mexico-Canada Agreement (USMCA) has since fallen under scrutiny. This is to be expected as the industry gains perspective on the various aspects of the agreement. The first ruling saw panel agreeing with the U.S. that Canada was breaching USMCA commitments by reserving most of its tariff-rate quota (TRQs) for in-country use. This resulted in Canada being given 45 days to comply with the panel’s ruling. If they fail to do so, the U.S. could place tariffs on Canadian dairy products.

However, the issue lies in Canada’s willingness to give TRQs to non-Canadian importers, thereby limiting access to dairy imports agreed upon under USMCA. For a country whose dairy sector has largely remain unchanged since 1994 — when NAFTA was negotiated— all eyes are on the third of February when Canada will make its response.

Read more on the USMCA dispute, Canadian dairy and trade negotiations here.