May 26, 2022 –

The United States has filed a second request for consultation on Canada’s dairy tariff-rate quota (TRQ) allocation mechanism announced earlier this month. The United States Trade Representative claims that Canada continues to restrict dairy in a manner that is inconsistent with the terms of the Canada-United States-Mexico-Agreement (CUSMA).  

DPAC shares the government’s view that Canada has met its obligations under CUSMA and that its dairy TRQ allocation mechanisms are compliant with the agreement. 

The USTR’s request on May 25 follows Canada’s announcement earlier this month that it had developed a new dairy TRQ allocation mechanism in order to comply with an earlier CUSMA panel decision. In our view, a key outcome of the last panel decision was the acknowledgement that Canada “has significant discretion in designing and implementing its allocation mechanisms.” 

As was the case with the USTR’s first CUSMA challenge, DPAC will continue to work collaboratively with the Government of Canada as it defends its ability to implement a TRQ allocation mechanism that balances trade commitments and the stability of its domestic dairy supply management system.

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