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Canada preparing to defend itself in CUSMA dairy dispute

Canada preparing to defend itself in CUSMA dairy dispute

The U.S. has requested a dispute settlement panel over dairy imports

By Diego Flammini
Staff Writer

Members of Canada’s federal government are preparing to defend the country’s implementation of the dairy portion of the Canada-United States-Mexico Agreement (CUSMA).

United States Trade Representative Katherine Tai announced on May 25 the United States wants a three-person dispute settlement panel to review rules Canada uses “that undermine the ability of American dairy exporters to sell a wide range of products to Canadian consumers.”

Dispute settlement rules are set out in Chapter 31 of the trade deal.

The United States alleges Canada is allocating some tariff-rate quotas on 14 dairy products like milk, cream, ice cream and whey powder to Canadian processors.

Canadian government officials, however, believe Canada is adhering to the provisions set out in the negotiated deal and will present corresponding evidence.

“Canada is disappointed that the United States has requested a dispute settlement panel. 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,” Mary Ng, Canada’s international trade minister, said in a May 25 statement.

“Our government will continue to stand up for Canada’s dairy industry, farmers and workers and will continue to preserve, protect and defend our supply management system.”

Members of the Canadian dairy sector are confident the dispute will end in Canada’s favour.

Canada’s actions have been in line with CUSMA, said Pierre Lampron, president of Dairy Farmers of Canada.

“Canada’s allocation of its TRQs is consistent with the terms of CUSMA/USMCA, thus we believe the Canadian government has a solid case to present before the panel and ultimately our right to administer TRQs will be recognized,” he told in an emailed statement.

Months are likely to pass before the dispute is settled.

Canada and the United States have 35 days to finalize the composition of the panel. From there it could take up to eight months to conclude the case, bringing its completion to around December.

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