GREEN BAY, Wis. — Edge Dairy Farmer Cooperative, one of the largest dairy co-ops in the country, today expressed disappointment in the ruling by a dispute settlement panel established under the U.S.-Mexico-Canada Agreement. U.S. trade officials contend Canada is unfairly limiting export opportunities for America’s dairy farmers and processors.
The panel investigated Canada’s allocation of its tariff-rate quotas for dairy products under the trade agreement; two of the three panelists found that Canada’s measures do not breach any of the USMCA commitments cited by U.S. trade officials.
Statement from Edge President Brody Stapel:
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“U.S. dairy was optimistic USMCA would bring new opportunities, but both sides must play by the rules. We are disappointed by the ruling but do not consider this issue settled. U.S. trade officials must continue finding ways to uphold the commitments Canada — and all U.S. trade partners — make under trade agreements.
“USMCA promised opportunity for American dairy farmers — an estimated 50% annual increase in export value. Unfortunately, processors of high-quality dairy products still cannot find ways to get their product onto Canadian grocery store shelves. This issue remains a key focus for Edge, and we will continue supporting U.S. trade officials in finding a path forward.”
Background:
Under USMCA, U.S. dairy producers were granted increased market access to Canada by way of preferential tariff rates for in-quota quantities of certain products, such as milk, cheese and skim milk powders. Prior to USMCA being entered into force, the U.S. had concerns with Canada’s dairy TRQ allocation measures, ultimately initiating the USMCA dispute settlement process in late 2020.
The first panel report, completed in December 2021, determined that Canada’s implementation of the TRQs restricted access of U.S. dairy products by setting aside quotas specifically for Canadian processors. Per the findings of the panel, Canada was required to come into compliance. The country published a revised plan, but the U.S. still found the new measures inconsistent with Canada’s obligations under the trade deal and sought a new set of consultations in May 2022.
In December 2022, the U.S. requested a new set of consultations with Canada after identifying additional concerns with the dairy TRQ policies and established this most recent dispute settlement panel in January 2023.
According to USDA, Canada is the United States’ second largest export market for dairy products, worth about $1.03 Billion in 2022.
Click here to read USTR’s announcement and more background about the issue.
