WASHINGTON – Leaders from the US Dairy Export Council (USDEC), National Milk Producers Federation (NMPF) and International Dairy Foods Association (IDFA) all shared their disapproval of the Canadian government’s changes to how dairy tariff rate quotas are allocated under the United States-Mexico-Canada Agreement (USMCA).
The USDEC and NMPF jointly called on the US government to levy retaliatory tariffs on Canada, citing the country’s refusal to meet its signed treaty obligations falling under the USMCA.
The IDFA, meanwhile, stated it rejected Canada’s altering of dairy tariff rate quotas and publicly requested that the Office of the US Trade Representative “hold Canada accountable for trade distorting practices that go against both the intent and the letter of the USCMA agreement.”
The dairy organizations all pointed to a USMCA dispute panel previously finding Canada to be noncompliant with dairy tariff rate quota commitments. The USDEC and NMPF stated that when Canada announced its new tariff rate quotas on May 16, it showed no indication of plans to comply.
“USTR, USDA and scores of members of congress from both sides of the aisle have worked diligently to ensure American dairy farmers and manufacturers benefit from USMCA,” stated Krysta Harden, president and chief executive officer of USDEC. “Unfortunately, Canada simply refuses to institute real reform, and such actions must have consequences. Retaliatory tariffs are both fair and necessary in this circumstance, as clearly provided for by USMCA.”
Jim Mulhern, president and chief executive officer of NMPF, said Canada “made a clear choice to thumb its nose” at the US government and its international treaty commitments by disregarding the USMCA agreement.
“Ottawa’s decision (May 16) is clearly designed to test our resolve by doubling down on its longstanding dairy trade violations, ignoring both the spirit and the letter of its trade agreements,” Mulhern said. “That decision demands retaliatory action by the U.S. government. Otherwise, our trade agreements will be seen as toothless before the ink is dry.”
The IDFA’s president and chief executive officer, Michael Dykes, DVM, called the dairy tariff rate quotas “completely unacceptable,” and said they showed Canada is ignoring trade commitments.
“The US dairy industry has made clear from the start that US dairy exporters demand real TRQ reform that will permit the market access Canada agreed to,” Dykes stated. “The US met with Canada a week ago on this very matter and expected a good faith effort. Instead, Canada continues to deny US 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 (May 16) and demands a swift response from USTR.”
The IDFA requested that Canada not be permitted to “blatantly disregard their trade obligations after having been found non-compliant by a neutral and expert panel, only to then ignore their obligations without consequence,” Dykes added.
He said the US government must “hold Canada accountable,” and stated the IDFA expects the USTR and US Department of Agriculture to follow through on that front. The IDFA has advocated for tariff rate quota reform and retaliatory tariffs, and has urged the US government to evaluate disputing Canada’s subsidized milk protein exports under World Trade Organization rules.
Previously, on April 19, the USDEC and NMPF filed public comments on the matter with Global Affairs Canada. In part, the comments stated: “Canada’s proposed allocation and administration policy changes in response to the CUSMA report continue to fall woefully short of full compliance with Canada’s CUSMA obligations. This has consequences not only for the agreed-upon CUSMA benefits denied US and Canadian stakeholders, but also for the credibility of CUSMA enforcement procedures undergoing their first test in this dispute and for the success of CUSMA itself. We urge Canada to consider its larger interest in the success of the CUSMA and modify its dairy TRQ allocation and administration policies to give effect, in good faith, to Canada’s CUSMA commitments.”