Canada no hurry to open dairy market for U. S.
2023.02.10 14:13
Canada no hurry to open dairy market for U. S.
By Ray Johnson
Budrigannews.com – According to Washington’s new agricultural trade boss, Canada must allow dairy product processors in the United States access to its import quotas in order to resolve a second dairy trade issue.
According to Doug McKalip, the chief agricultural trade negotiator for the office of the U.S. Trade Representative, who spoke with Reuters on Thursday, Canada’s second attempt to allocate dairy tariff quotas excluded the majority of businesses and provided only a small portion of the access that was promised in the trade agreement between the United States, Mexico, and Canada.
According to McKalip, “Dairy farmers expect to have the market access benefits they were promised” as a result of Canada’s agreement to open its market to U.S. dairy products under the USMCA.
USTR requested a USMCA dispute settlement panel for the second time on January 31, arguing that Canada’s revised quota allocation rules did not address the issues that led the initial dispute panel to conclude last year that Canada’s practices were in violation of its obligations under the USMCA.
Mary Ng, Canada’s trade minister, has responded by promising to defend the supply management system and accusing USTR of using the dispute settlement process to “re-negotiate” the terms of the USMCA deal.
The first panel had decided that Canada had illegally reserved the majority of its quotas for raw milk imports by Canadian processors. As a result, Canadian retailers and food service providers were unable to import many higher-value dairy products from the United States.
Canada’s quota adjustments, according to McKalip, “fell again, far short of being meaningful market access.”
Separately, the farm trade official, whose appointment to his position was approved by the Senate on December 23, told Reuters that he asked Mexico to explain the science behind its genetically modified corn ban, paving the way for another USMCA trade dispute.
Canada agreed to allow the United States to increase its exports of skim milk and milk proteins to Canada as part of the USMCA trade deal, which will go into effect in 2020 and grant dairy producers in the United States access to about 3.5 percent of its $17 billion annual market.
The deal preserved Canada’s supply management system, which has been in place for decades and restricts domestic production of dairy, eggs, and poultry to protect the country’s income from high tariffs from import competition.
The purpose of the tariff-rate quotas is to allow certain quantities of dairy products to be imported duty-free and impose tariffs when the caps are reached.
However, McKalip stated that Canada must open the quotas to all buyers and sellers because it continues to deny retailers and food service businesses access.
According to McKalip, “it should work the same way that it does for almost any commodity and any type of relationship of this kind,” which is that “they truly do provide market access” and “dairy farmers and various dairy products here in the United States are able to compete and be part of selling to willing buyers.”
McKalip stated of the United States’ position, “We’re not asking them to do something they didn’t already agree to when they agreed to the provisions in USMCA.”
