The U.S. dairy industry celebrated a decision published Tuesday, which found Canada is improperly restricting access to its market for U.S. dairy products. The restrictions violate U.S.-Mexico Canada Agreement tariff-rate quota commitments.
The case is the first of any kind brought before a USMCA Dispute Settlement Panel and was launched with broad bipartisan support last May.
National Milk Producers Federation President and CEO Jim Mulhern says, "The United States and Canada negotiated specific market access terms covering a wide variety of dairy products, but instead of playing by those mutually agreed-upon rules, Canada ignored its commitments."
TRQs are a system of tariffs negotiated between countries that allow a predetermined quantity of imports at a specified tariff rate, where that rate is often at or near zero.
Any additional imports above that predetermined quantity are subject to significantly higher tariffs. In the case of U.S. dairy products, the additional Canadian tariffs typically price U.S. dairy products out of Canada’s market.