Access to dairy markets is part of the U.S.- Mexico- Canada Agreement but a recent dispute panel found that Canada has not been fulfilling its commitments.

The agreement set dairy tariff-rate quotas (TRQ’s) which allow there to be little to no duties on imported goods of dairy products. Imports after the quota are subject to high tariffs.

Mykel Wedig, Associate Director of Government Affairs for Edge Dairy Farmer Cooperative says that Canada reserved around 85 percent of lower tariff rates for Canadian farmers.

USMCA expected a lot more imports from Canada after they're fully implemented. But unfortunately, we didn't see that because Canada was giving those TRQ’s to processors instead of opening it up to other importers like retailers and things like that.

Not having access to the TRQ’s greatly impacted the amount of money coming into the dairy industry.  Wedig said they are hoping for a rise in imports once Canada complies with the agreement.

The US International Trade Commission estimated that we see an increase of $227 million dairy products after the new USMCA was implemented, which we just haven't seen.

The USMCA panel gave Canada 45 days to comply with the panel’s findings.

Check out more of my conversation with Mykel Wedig:

Background

Under the UMCA, United States Dairy Producers were granted access to Canadian markets through low tariff rates on certain products. Less than one year later, the Biden administration requested a dispute settlement panel be created to discuss Canada’s failure to comply.

Products that have TQR’s under the USMCA include milk, cream, skim milk powder, butter and cream powder, industrial cheeses, cheeses of all types, milk powders, concentrated or condensed milk, yogurt and buttermilk, powdered buttermilk, whey powder, products consisting of natural milk constituents, ice cream and ice cream mixes, and other dairy.

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