Dairy associations applaud USMCA report holding Canada to its trade obligations
The USMCA panel — the first dispute panel to be established under the agreement — found elements of Canada’s TRQ administration to be in breach of commitments under the agreement.
In a joint Jan. 4 release, the International Dairy Foods Association (IDFA), the International Cheese Council of Canada (ICCC), the Dairy Companies Association of New Zealand (DCANZ) and Eucolait applauded the findings of the United States-Mexico-Canada Agreement’s (USMCA) dispute panel on Canada’s administration of its dairy tariff rate quotas (TRQs). The USMCA panel — the first dispute panel to be established under the agreement — found elements of Canada’s TRQ administration to be in breach of commitments under the agreement, the associations said, and has recommended Canada amend its TRQ allocation regulations consistent with USMCA. Canada has until Feb. 3, 2022, to respond to the panel’s findings and make its TRQ regulations consistent with USMCA.
Under USMCA, Canada committed to ensuring its TRQ administration is “fair and equitable”. However, Canada’s TRQ administration was found to discourage imports by setting aside quota allocation to be used by Canadian processors only and restricting the ability of exporters to sell directly to distributors or retailers, among other practices, the associations said. The effect of Canada’s TRQ administration and allocation has been to limit and distort the market access Canada has granted partners under its agreements. For instance, under USMCA an average of 68% of dairy quotas have been filled in its second year of implementation, while under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), only 8% of dairy quotas on average have been filled in its third year of implementation.