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Canada’s dairy import quotas don’t unfairly restrict entry for United States producers, in keeping with a panel ruling underneath North America’s commerce pact, marking a serious victory for a Canadian sector lengthy accused of protectionism.
A majority of the dispute-settlement panel members discovered that the quotas aren’t inconsistent with the United States-Mexico-Canada Settlement, ruling in opposition to all the American arguments in opposition to Canada’s restrictive system.
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“Canada is very pleased with the dispute-settlement panel’s findings, with all outcomes clearly in favour of Canada,” Commerce Minister Mary Ng stated Nov. 24 in an announcement. “This is good news for Canada’s dairy industry and our system of supply management.”
The choice, which can’t be appealed, means Canada gained’t need to make any additional adjustments to the system that has been a long-standing trade irritant between the nations. Canada has firmly managed dairy provides for many years, limiting home manufacturing and making use of heavy tariffs to limit imports, in an effort to stabilize incomes for native farmers.
United States commerce consultant Katherine Tai stated she was “very disappointed” by the panel’s findings.
“Despite the conclusions of this report, the United States continues to have serious concerns about how Canada is implementing the dairy market access commitments it made in the agreement,” she stated Friday in an announcement. “We will continue to work to address this issue with Canada, and we will not hesitate to use all available tools to enforce our trade agreements and ensure that U.S. workers, farmers, manufacturers and exporters receive the full benefits of the USMCA.”
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Below the USMCA that took impact July 2020, Canada conceded to granting extra duty-free or decrease tariff entry throughout dairy merchandise together with milk, cream, cheese, yogurt and ice cream through a tariff-rate quota. However Canada was allocating the majority of these imports to processors, limiting the flexibility of different teams like retailers and food-service operators to purchase U.S. product.
The U.S. gained a ruling from a primary dispute-settlement panel in 2021, forcing Canada to tweak its quota allocations. However Tai argued the adjustments failed to repair the issue and requested a second panel. The ruling was disclosed to the events on Nov. 10 and made public on Friday.
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Canada’s authorities will proceed to “preserve and defend” the supply-management system, Ng stated. The system “supports producers by providing the opportunity to receive fair returns for their labour and investments, brings stability for processors and benefits consumers by providing them with a steady supply of high-quality products,” she stated.
— With help from Alicia Diaz.
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