State Farm Groups React to USMCA Dispute Settlement Case

U.S. Trade Representative Katherine Tai announced that the United States will take enforcement action to ensure Canada meets its commitments under the U.S. Mexico-Canada Agreement, specifically when it comes to dairy trade. Groups like the U.S. Dairy Export Council and National Milk Producers Federation have been calling for full enforcement of Canada's trade obligations given its ongoing refusal to change how it handles dairy market access under USMCA.

Initiating an official dispute settlement will establish a panel to determine whether Canada has been violating its trade obligations. If the panel determines a lack of compliance, the U.S. would then be granted the right to impose retaliatory duties if Canada fails to fix its problematic TRQ administrative practices.

"We are grateful for Ambassador Tai's leadership on this important issue as U.S. dairy farmers and processors deserve to utilize the full market opportunities that were sought after for them in the USMCA," said Jeff Lyon, general manager of the Madison-based FarmFirst Dairy Cooperative. "Now is the time to make it very clear to Canada's trade leaders--that failure to meet their agriculture trade obligations will have consequences. Canada needs to stop building barriers in spite of the trade agreements they've signed and participate as a good trading partner."

Brody Stapel, who leads the Green Bay-based Edge Dairy Cooperative, adds that Canada's quotas allow that country to impose higher tariffs on imports over a certain quantity for milk, cheese, skim milk powders and other dairy products.

"International trade is key to economic growth and stability for our dairy farmers and processors. That's why additional market access into Canada is an important part of USMCA," Stapel said. "Edge and our farmers appreciate USTR's commitment to holding Canada to the agreement and giving the U.S. dairy community greater export opportunities as intended."

Under the previous administration, USTR took an initial enforcement step in December by seeking consultations, which did not resolve the issue. In the new action, USTR asked for the establishment of a dispute settlement panel, which is expected to issue a report later this year.