The most severe and long-standing concern remains Canada’s deliberate actions to undermine dairy market access commitments. IDFA cites Canada’s pre-emptive changing of milk price classes—specifically the implementation of a new scheme prior to the USMCA’s entry-into-force—to skirt the transparency requirements of Article 3.A.3. Furthermore, Canada employs an ineffective dairy pricing formula with an outdated, artificially inflated processor margin from approximately 1972, which negatively impacts prices and results in a skewed relationship between product types, effectively disadvantaging U.S. milk protein exporters.

Canada is also accused of worsening the administration of tariff-rate quotas (TRQs). IDFA states that Canada’s TRQ policies are not transparent or fair, maintaining activity requirements that unduly favor domestic processors by double-counting their domestic manufacturing quantities toward allocated quota. Furthermore, Canada explicitly prohibits retailers and foodservice operators from applying for quotas and frequently issues allocations as small as one kilogram to non-processor importers, forcing them to buy quota at higher rates from favored processors to conduct normal business.

Beyond Canada, IDFA raised concerns over Mexico’s national Milk Self-Sufficiency Plan, which seeks a 25% increase in domestic milk production by 2030. While supporting Mexico’s right to invest in its domestic sector, IDFA objects to the Plan’s objectives of limiting U.S. dairy imports—which account for 30% of Mexico’s dairy consumption. Given that U.S. powdered milk imports alone were worth over $1 billion in 2024, IDFA warns that specifically targeting U.S. imports would contravene USMCA commitments on import and export restrictions.