The U.S. dairy industry is celebrating a victory in the first USMCA trade agreement dispute settlement process. U.S. Trade Representative Katherine Tai announced the United States prevailed against Canada, with the review panel agreeing that Canada is breaching its trade agreement requirements by reserving most of the in-quota amount of dairy tariff-rate quotas for Canadian processors.
A tariff-rate quota applies a preferential rate of duty to an “in-quota” quantity of imports and a different rate to imports above that in-quota quantity. The USTR’s office says Canada published notices to importers that in June and October 2020 and May 2021 for dairy TRQs, Canada set aside and reserved a percentage of the quota for processors and for so-called “further processors”, contrary to Canada’s USMCA commitments.
