7 February 2023
Canadian Custom Brokerage

U.S. pushes ahead in CUSMA dispute on Canadian dairy tariff-rate quota policies

The United States formally requested a dispute settlement panel under the Canada-United States-Mexico Agreement (CUSMA) regarding Canada’s administration of its dairy tariff rate quotas (TRQs).

The announcement follows dispute settlement consultations between Canada and the United States that took place on January 17, 2023. The Parties were not able to resolve the matter.

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

In this new panel proceeding, the United States is challenging Canada’s revised dairy TRQ allocation measures that use a market-share approach for determining TRQ allocations. The U.S. contends that the measures impose new conditions effectively prohibiting retailers, food service operators, and other types of importers from utilizing TRQ allocations. The American Government claims that Canada undermines the market access it agreed to provide in CUSMA.

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