Dairy Producers Already Warning On Canada Dairy Changes

The U.S.-Mexico-Canada Agreement (USMCA) took effect on Wednesday and the International Dairy Foods Association (IDFA) penned a June 30 letter which contends already there are issues on dairy policy relative to Canada's implementation of dairy product tariff rate quotas (TRQs).

“…we believe that Canada is limiting certain U.S. dairy exports by maintaining restrictive TRQs and not moving quickly enough to implement a tariff rate quota (TRQ) administration system that is consistent with USMCA's Agriculture Chapter (the Agreement) as well as the annex on TRQs in the Canadian Schedule,” IDFA said in the letter to Gregg Doud, the ag trade negotiator at the Office of the U.S. Trade Representative.

They note that under USMCA, Canada is not to put in place any new conditions or eligibility requirements on TRQs “beyond those set forth in the Canadian schedule.” However, the group noted that the eligibility and allocation calculations on proposed TRQs for many dairy products “impose eligibility and allocation calculation conditions that clearly fall outside of those set forth in the Canada schedule.”

They specifically pointed to limiting access on the TRQ for Cheese of All Types to 15% for distributors and 85% for processors. “There is no such restriction in the Canada schedule,” IDFA said. They further noted there are new restrictions in place that “eliminate the opportunities for distributors to import bulk and retail-ready butter across the entire quote year,” based on a recent announcement by Global Affairs Canada (GAC).

“I formally am registering our organization's deep concerns regarding Canada's non-compliance with the clear terms of the Agriculture Chapter of the Agreement,” IDFA President and CEO Michael Dykes said.

U.S. Trade Representative Robert Lighthizer told the House Ways & Means Committee the administration would be closely monitoring Canada and dairy and other provisions in USMCA, warning, “If there's any shading of the benefits to American farmers, we're going to bring a case against them.”

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