November 27, 2023

WASHINGTON – On Friday, a dispute settlement panel established under the United States – Mexico – Canada Agreement (USMCA) released a report regarding Canada’s dairy tariff-rate quota (TRQ) allocation measures.

In 2022, the U.S. won favorable consideration with a USMCA panel that agreed with the U.S. that Canada was breaching its USMCA commitments by reserving most of the in-quota quantity in its dairy TRQs for the exclusive use of Canadian processors. Canada updated its TRQ measures, but the U.S. challenged that Canada’s dairy TRQ allocation measures still posed undue restraint on U.S. dairy exporters in the Canadian market. In the report released on Friday, two of three panelists determined that the updated TRQ measures satisfied Canada’s USMCA obligations.

While disappointed with the outcome, the pursuit of the panel reflects Ambassador Tai’s strong commitment to enforce the USMCA and ensure that America’s farmers, processors, and exporters receive the benefits they were promised.

Following the release of the panel decision, government leaders and stakeholders underscored the importance of enforcing the USMCA and praised Ambassador Tai for fighting for American farmers.


Read more about what they are saying:

U.S. Secretary of Agriculture Tom Vilsack: “The United States won the first USMCA case on Canada’s dairy TRQ allocation system with the ultimate goal of securing fair market access for U.S. dairy farmers, workers, processors, and exporters. Although we are disappointed in the outcome of this second case, we brought this case to refine and expand upon our win in the first case. We will continue to voice deep concerns about Canada’s system. We remain focused on securing the market access we believe Canada committed to under the USMCA and we will continue exploring all avenues available to achieve that goal.”

House Committee on Ways and Means Chairman Jason Smith (MO-08): “The panel’s decision leaves in place a status quo of Canadian dairy restrictions that is simply unacceptable. American farmers deserve a level playing field, and Canada must uphold both the spirit and the letter of its obligations under USMCA. Improved agricultural market access and enhanced enforcement mechanisms were key victories achieved under the USMCA for American farmers and workers. They were some of the many reasons the agreement received overwhelming bipartisan support. I will continue working with partners and stakeholders to ensure transparent and equitable access to Canadian markets for U.S. dairy producers.”

House Agriculture Committee Chairman GT Thompson (PA-15) and Ranking Member David Scott (GA-13): “We are disappointed in today’s announcement and the decision of the dispute panel. It is critical the U.S. encourage and enforce USMCA, and this decision allows Canada to continue their questionable protectionist practices that disallow fair access to Canadian markets. We appreciate Ambassador Tai and the Biden Administration’s continued pursuit to ensure fair market access for U.S. dairy producers.”

Congresswoman Elise Stefanik (NY-21): “It is entirely unacceptable that the current Canadian dairy restrictions harming U.S. farmers are allowed to continue. Our dairy farmers in Upstate New York and the North Country work hard to provide delicious and nutritious products for our communities and deserve the market access they were promised under USMCA. This USMCA dispute panel’s decision allows the status quo to continue. This is untenable. I will continue to work to ensure that USMCA is enforced to allow fair market access for our dairy farmers.”

Congressman Adrian Smith (NE-03): “I remain fully supportive of holding Canada to its USMCA commitments & am disappointed in the dispute settlement panel’s ruling on Canada's dairy TRQ allocation measures. This does not take away from the panel’s 2022 determination that Canada breached its USMCA commitments.”

Krysta Harden, President and CEO of the U.S. Dairy Export Council: “We do however want to express our appreciation for allies in Congress and the Administration for their efforts and commitment to fighting for U.S. dairy…We are committed to working with USTR and USDA to evaluate efforts to address Canada’s continued harmful actions that depress dairy imports while simultaneously evading USMCA’s dairy export disciplines.”

Michael Dykes, D.V.M, President and CEO of the International Dairy Foods Association (IDFA): “First and foremost, IDFA commends the hard work of the U.S. government team that worked on this dispute; the outcome of this dispute is not an indication of the government’s efforts in this particular matter.”

Jim Mulhern, President and CEO of the National Milk Producers Federation: “Despite this independent panel’s adverse ruling, we’d like to thank the Biden Administration and the many members of Congress who supported us for their tireless pursuit of justice for America’s dairy sector.”