U.S. requests a dispute settlement panel on Canada’s dairy TRQs under CUSMA

The United States has requested and established a dispute settlement panel regarding Canada’s administration of its dairy tariff rate quota (TRQ) policies under the Canada-United States-Mexico Agreement (CUSMA).

The United States is challenging Canada’s allocation of dairy tariff-rate quotas (TRQs), specifically the set-aside of a percentage of each dairy TRQ exclusively for Canadian processors. The United States claims these measures deny the ability of U.S. dairy farmers, workers, and exporters to utilize the TRQs and realize the full benefit of the CUSMA.

Canada’s Minister of International Trade, May Ng, said in a statement: “Canada is disappointed that the United States has requested a dispute settlement panel.

“Under CUSMA, Canada agreed to provide some additional market access to the United States for dairy while successfully defending our supply management system and dairy industry. We are confident that our policies are in full compliance with our CUSMA TRQ obligations, and we will vigorously defend our position during the dispute settlement process.”

Under the CUSMA dispute settlement chapter, a panel is automatically established upon receipt of a request. Under the timelines specified by the Agreement, the parties have up to 35 days to finalize the composition of the panel.

The dispute settlement process could take up to 8 months to conclude (in this case, up to December 2021).