Dairy Groups Question Canada Over USMCA

As Trade Officials Meet Over USMCA, Dairy Industry Raises Concerns Over Canadian Actions

Jerry Hagstrom
By  Jerry Hagstrom , DTN Political Correspondent
As the inaugural USMCA Free Trade Commission meets this week, the U.S. dairy industry and other groups want U.S. trade officials to call out Canada for the way Canadian officials are setting up tariffs and quotas on U.S. products going forward. (DTN file photo)

WASHINGTON (DTN) -- The U.S. dairy industry continues pushing for trade officials to start addressing actions by Canada on tariffs and quotas as U.S. Trade Representative Katherine Tai meets online with trade officials from Mexico and Canada through Tuesday.

Trade officials from the three countries are holding the inaugural gathering of the United States-Mexico-Canada Agreement Free Trade Commission (USMCA FTC).

Tatiana Clouthier, Mexican secretary of economy, and Mary Ng, the Canadian minister of small business, export promotion and international trade, will attend the online meeting with Tai.

"The USMCA modernized the trading relationship between the three countries for the 21st century," USTR said in a statement.

"The FTC is the first step toward realizing the full potential of the agreement and building an inclusive trade policy for North America that fosters broad-based and equitable growth, spurs innovation, protects our shared environment, and helps people from all walks of life."

USTR said the ministers will receive updates about work to advance the agreement and discuss USMCA's labor and environmental obligations, but they also face a list of trade conflicts, both agricultural and nonagricultural.

On Sunday, a group of 67 dairy companies, the U.S. Dairy Export Council and the National Milk Producers Federation urged Tai in a letter to initiate a dispute settlement case with the Canadian government over its dairy tariff-rate quota (TRQ) administration if ongoing consultations and a USMCA Free Trade Commission meeting do not result in immediate resolution.

USTR started consultations in December 2020 with Canada over its TRQ policies as part of its obligations under the USMCA, the dairy group noted.

"Several months post-consultations, it is not readily apparent that progress has been made on resolving Canada's circumvention of its trade obligations," the group added in a news release.

"The U.S. dairy industry proudly worked with USTR and members of Congress on a bicameral and bipartisan basis during the 116th Congress to secure strong, enforceable dairy provisions in the USMCA," said Krysta Harden, president and CEO of USDEC.

"Even while we knew it was important to secure strong text in the agreement, we also knew it was going to be just as critical for the provisions to be properly implemented and enforced. This is why we need USTR to take bold action to ensure the U.S. dairy industry fully benefits from the hard-fought wins included in the USMCA.

"America's dairy farmers appreciated USTR initiating consultations with Canada on its dairy TRQ allocation measures and the decision to hold USMCA Free Trade Commission discussions to pursue reforms," said Jim Mulhern, president and CEO of NMPF.

"But Canada has always been obstinate on dairy, and at this stage, it is increasingly clear that further action is needed to ensure a fair and transparent enforcement of USMCA," Mulhern said.

"This is why America's dairy farmers are asking USTR to initiate a dispute settlement case should talks with Canada this week fail to yield a full resolution. We look forward to working closely with the administration as they pursue every option available to them to ensure America's dairy farmers fully benefit from the USMCA's market access provisions."

USMCA is expected to increase U.S. agricultural exports by about $2 billion annually. Poultry and egg sales are both expected to grow to Canada. Still, about 12% of the boost in agricultural sales, or about $242 million, is expected to come from higher dairy sales to Canada.

Jerry Hagstrom can be reached at jhagstrom@nationaljournal.com

Follow him on Twitter @hagstromreport

Jerry Hagstrom