A decision by the A U.S.-Mexico-Canada Agreement (USMCA) dispute panel to allow Canada to impose improper restrictions on U.S. dairy farmers is drawing heat from Congress’ lone dairy farmer, Rep. David Valadao (R–Hanford).
The backstory: In January 2022, a dispute panel ruled that Canada was in breach of its obligations to the U.S. dairy industry.
- Canada changed its dairy tariff rate quota system following that ruling, which Valadao says essentially preserved the status quo and failed to make meaningful concerns.
- U.S. Trade Representative Katherine Tai initiated a second dispute panel to challenge the changes.
The big picture: Last Friday the panel ruled that Canada was not obligated to make further changes to its tariff rate quota system.
- While the U.S. exported more than $1 billion in dairy products to Canada last year, exporters were unable to fill any Canadian dairy quotas granted in the USMCA.
- The average tariff fill rate was 42 percent across all quotas.
What they’re saying: “It is unacceptable that Canada is not being held accountable for its failure to meet its obligations to the U.S. dairy industry under the USMCA,” Valadao said. “Our trade agreements only work if they are enforced, and we must use every tool at our disposal to ensure Canada holds up their end of the deal. I will continue working to protect fair market access for dairy farmers and manufacturers here in the Central Valley.”