Canada Reopens Dairy TRQ Applications; US Exporters Say TRQs Still Block Them
Canada published a notice welcoming distributors who do not have an allocation under dairy tariff rate quotas in 2022 to apply for unallocated quotas for industrial cheeses, and said that it no longer has allocation pools dedicated to processors.
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Canada lost a dispute under USMCA, because there was no way for U.S. exporters to access some categories at all, as they were all dedicated to Canadian processors. The panel adjudicators wrote, "Under the Panel’s decision, Canada is not restricted in the amount of quota it grants to processors; it is restricted in its ability to ring-fence all or any part of a TRQ quota and permit access only to processors."
Canadian Trade Minister Mary Ng said May 16, "“Canada takes its commitments and obligations under international agreements seriously. These include the commitments that Canada has made under CUSMA with the United States, Canada’s closest trading partner. We are confident that the new policies fully comply with the panel’s findings and its recognition that Canada has the full discretion to administer its TRQs under CUSMA in a manner that supports Canada’s supply management system for dairy." Canada calls the new NAFTA CUSMA, rather than USMCA, putting Canada first in the title.
Canada said it would not make a decision on the unallocated quota in this calendar year immediately, "given Canada’s deep concerns with the discriminatory electric vehicle tax credits proposed in the Build Back Better bill under U.S. Congress consideration." But it said it would act by July 31.
The International Dairy Foods Association issued a statement responding to the notice, saying that Canada ignored the panel's findings. “This outcome is completely unacceptable,” said IDFA CEO Michael Dykes. “The U.S. dairy industry has made clear from the start that U.S. dairy exporters demand real TRQ reform that will permit the market access Canada agreed to. The U.S. met with Canada a week ago on this very matter and expected a good faith effort. Instead, Canada continues to deny U.S. dairy products from reaching their full capacity under the terms of the deal and continues to deny the existence of any obligations. IDFA thoroughly rejects the Canadian policy published today and demands a swift response from USTR.”
The office of USTR did not respond to a request for comment from ECD.