A dispute settlement panel has found that Canada’s dairy import policies do not breach its commitments under a trade pact, despite Washington’s concerns, US authorities said Friday.
“Two of the three panelists found that Canada’s measures do not breach of any of the USMCA commitments that the United States cited,” said the US Trade Representative’s office, referring to the US-Mexico-Canada Agreement.
Canada’s policies limit a large share of American dairy exports — including milk, butter, yogurt and ice cream — to Canadian processors under a system known as tariff rate quotas (TRQs).
A TRQ applies a preferential tariff to a set volume or quota of product, and a higher duty for amounts above that level.
US officials argue that the system restricts market access for American producers, despite an earlier attempt by Canada to bring its policies into compliance with its USMCA commitments.
“I am very disappointed by the findings,” said US Trade Representative Katherine Tai in a statement.
“Despite the conclusions of this report, the United States continues to have serious concerns about how Canada is implementing the dairy market access commitments it made in the Agreement,” she added.
Agriculture Secretary Tom Vilsack added: “We remain focused on securing the market access we believe Canada committed to under the USMCA and we will continue exploring all avenues available to achieve that goal.”
The United States had earlier raised concerns about Canada’s dairy TRQ allocation measures.
In 2021, an earlier dispute panel found them to be inconsistent with Canada’s obligations and Ottawa has since introduced changes.
