The
U.S. Trade Representative's office said its complaint alleges
that Canada was improperly allocating USMCA tariff-rate import
quotas on 14 dairy products, diverting a portion of them to
Canadian processors and unfairly limiting export opportunities
for U.S. dairy farmers and processors.
USTR first requested https://reut.rs/3qBA2V0 consultations with
Canada on the matter in December, when former President Donald
Trump's administration was still in office. USTR officials said
that Canada had been "responsive" in discussing the U.S.
concerns but that the dispute was not resolved.
The USMCA, which took effect in July 2020, replacing the North
American Free Trade Agreement, granted some additional limited
access for U.S. dairy farmers and processors to Canada's largely
closed domestic dairy market, via tariff-rate quotas on 14
products from milk powder to ice cream and cheese.
USTR claims that Canada is illegally reserving a portion of
those quotas for Canadian processors.
"Canada is disappointed that the United States has requested a
dispute settlement panel," Canadian Trade Minister Mary Ng said
in a statement," adding the country is confident its policies
"are in full compliance" with its tariff-rate quota obligations.
A dispute panel will take about 30 days to form under the
USMCA's dispute settlement system, and is due to file an initial
report within about 120 days, with a final report 30 days after
that - about late November.
USTR officials said that a ruling in the United States' favor
would lead to further consultations with Canada to resolve the
matter but could ultimately lead to punitive tariffs imposed on
imports from Canada.
"A top priority for the Biden-Harris Administration is fully
enforcing the USMCA and ensuring that it benefits American
workers," U.S. Trade Representative Katherine Tai said in a
statement.
"Launching the first panel request under the agreement will
ensure our dairy industry and its workers can seize new
opportunities under the USMCA to market and sell U.S. products
to Canadian consumers."
(Reporting by David Lawder; Additional reporting by David
Ljunggren; Editing by Peter Cooney)
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