January 13, 2022

U.S. Prevails in USMCA dispute on Canadian Dairy Restrictions

The US has prevailed in the first dispute settlement panel proceeding ever brought forward under the USMCA agreement.  

A USMCA panel agreed that Canada is breaching its commitments by holding most of the in-quota quantity of its dairy tariff-rate quotas (TRQ) for the sole use of Canadian processors.

The US requested a panel in May 2021 under Chapter 31 of the USMCA. The final report was issued in December 2021.  Under the Agreement rules, Canada has 45 days to comply with the Panel’s findings. 

A TRQ applies a preferential rate of duty to “in-quota” quantity of imports and a higher rate to imports above that “in-quota” quantity.  Canada set aside and reserved a percentage     of the quota for processors and for so-called “further processors”, which is contrary to Canada’s commitment under USMCA.  

To view the panel’s report, please use the below link here

Crane Trade Services can assist you with questions regarding this matter.  For assistance please contact CWTSConsulting@craneww.com.

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