U.S. formally requests dispute resolution over Canada’s dairy import quotas

The request marks an escalation of a U.S. complaint first lodged in December 2020, alleging that Canada was improperly allocating some of the USMCA's tariff-rate quotas on 14 dairy products, diverting a portion of them to Canadian processors and to the detriment of U.S. dairy farmers and processors. | Getty Images

The U.S. Trade Representative’s office said on Tuesday it requested a dispute settlement panel to review a U.S. challenge to Canada’s application of dairy import quotas under the new U.S.-Mexico-Canada Agreement on trade.

The request marks an escalation of a U.S. complaint first lodged in December 2020, alleging that Canada was improperly allocating some of the USMCA’s tariff-rate quotas on 14 dairy products, diverting a portion of them to Canadian processors and to the detriment of U.S. dairy farmers and processors.

International Trade Minister Mary Ng responded to the move by saying the government will “vigorously defend” supply management during the process and said Canada is “disappointed” in the U.S. decision.

“Canada is a strong proponent of rules-based multilateral trade and believes that international trade will play an important role in the global recovery from COVID-19. We take our obligations under international agreements seriously,” she said.

“Under CUSMA, Canada agreed to provide some additional market access to the United States for dairy while successfully defending our supply management system and dairy industry. We are confident that our policies are in full compliance with our CUSMA TRQ obligations, and we will vigorously defend our position during the dispute settlement process.”

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