U.S. Trade Representative (USTR) Robert Lighthizer formally announced the U.S. is exercising its rights under the U.S.-Mexico-Canada Agreement (USMCA) to address measures adopted by the Government of Canada that are contrary to the provisions of the agreement and harm U.S. dairy farmers.
Specifically, the United States is challenging Canada's allocation of dairy tariff-rate quotas (TRQs). By setting aside and reserving a percentage of each dairy TRQ exclusively for processors, USTR said, “Canada has undermined the ability of American dairy farmers and producers to utilize the agreed-upon TRQs and sell a wide range of dairy products to Canadian consumers.”
Lighthizer said the measures undertaken by Canada “violate its commitments” under USMCA. “We are disappointed that Canada's policies have made this first ever enforcement action under the USMCA necessary to ensure compliance with the agreement,” Lighthizer said in a statement.
The notice to Canada was given to Canada's Minister of Small Business, Export Promotion and International Trade Mary Ng via a letter.
If the two sides cannot resolve the issue via consultations, USTR said the U.S. “may request the establishment of a USMCA dispute settlement panel to examine the matter.”
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