U.S. dairy exporters are demanding Canada revise its dairy import quota rules under the U.S.-Mexico-Canada Agreement (USMCA), arguing that current rules, which favor processors and distributors, breach the agreement and limit U.S. market access. This comes as President Donald Trump threatens a 35-per-cent tariff on Canadian goods starting August 1. Canada maintains its commitment to defending supply management, despite U.S. claims of insufficient market penetration and previous panel findings in Canada's favor.
Canada flouting USMCA with dairy import quota rules, says U.S. industry
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TL;DR: Key points with love ❤️U.S. dairy exporters are demanding Canada revise its dairy import quota rules under the U.S.-Mexico-Canada Agreement (USMCA), arguing that current rules, which favor processors and distributors, breach the agreement and limit U.S. market access. This comes as President Donald Trump threatens a 35-per-cent tariff on Canadian goods starting August 1. Canada maintains its commitment to defending supply management, despite U.S. claims of insufficient market penetration and previous panel findings in Canada's favor.
Trending- 1 2016: Value of U.S. dairy exports to Canada was US$697.09-million.
- 2 2018: USMCA was negotiated, giving U.S. dairy expanded access to Canada.
- 3 2021 and 2023: The U.S. launched complaints against Canada regarding dairy TRQ rules.
- 4 Last week: President Trump sent a letter to Prime Minister Mark Carney threatening tariffs.
- 5 July 21: Original deadline for the Canada-U.S. trade deal.
- 6 August 1: New deadline for the Canada-U.S. trade deal and potential tariff imposition.
- 7 2024: Value of U.S. dairy exports to Canada grew to US$1.18-billion.
- Potential imposition of 35-per-cent tariffs on Canadian goods by the U.S.
- If U.S. exporters prevail, Canadian shoppers could see a wider range of U.S. dairy products.
- Potential negative impact on the Canadian dairy industry.
- Continued trade dispute and negotiations between Canada and the U.S.
What: U.S. dairy exporters are demanding Canada rewrite its rules regarding who can import dairy products under the USMCA, specifically concerning tariff rate quotas (TRQs).
When: Last week (Trump sent a letter); August 1 (new deadline for tariffs); 2018 (USMCA negotiated); 2021 and 2023 (U.S. launched complaints); 2024 (value of exports, cheese TRQ fill rate).
Where: Canada, United States.
Why: The U.S. argues Canada's current TRQ licence rules, which primarily allocate quotas to processors and distributors, breach the USMCA and prevent U.S. exporters from selling into the Canadian market at negotiated volumes. The U.S. also seeks to increase variety for Canadian consumers. Canada maintains its commitment to protecting supply management.
How: U.S. dairy exporters are pressuring for changes, supported by President Trump's threat of 35% tariffs on Canadian goods. The U.S. has previously launched complaints against Canada regarding these rules.