Another dispute settlement consultation is being requested under the U.S.-Mexico-Canada Agreement (USMCA). At issue once again are Canada’s dairy tariff-rate quota (TRQ) provisions. U.S. officials are now challenging the market-share approach that Canada is using for determining TRQ allocations.

“Rather than work toward meeting its obligations, Canada persists in implementing new dairy policies that are inconsistent with the USMCA, and which continue to deny U.S. workers, farmers, producers, and exporters the full benefits of market access they were initially promised,” said Ambassador Tai. “We remain steadfast in our commitment to use all tools available to enforce our trade agreements and ensure that our dairy industry can offer a wide range of high-quality American products to Canadian customers.”

A previous decision from a USMCA Dispute Settlement Panel determined that Canada was unfairly limiting dairy market access. Canada’s proposal for a resolution to the issue was rejected by the U.S. after additional consultations took place back in May. The latest dairy dispute centers on the criteria that Canada applies to different applicants. USTR contends that Canada is preventing importers and other eligible applicants from fully accessing TRQ allocations. The latest request for formal consultations with Canada serves as the first step in bringing another case before a USMCA Dispute Settlement Panel.

“It is deeply unfortunate that Canada simply refuses to honor the full terms of our agreement,” U.S. Dairy Export Council President and CEO Krysta Harden said in a press release. “USMCA is a fair deal that was thoroughly negotiated and agreed to by the Canadian government. The U.S. dairy community is thankful the administration and Congress have taken Canada’s violations seriously and are fighting for full export benefits that the American dairy industry earned.”