OTTAWA — Escalating a sour dispute predating the U.S. election, the Biden White House is taking on Canada’s method of allocating the limited tariff-free entry of American dairy products into this country.
U.S. Republicans and Democrats alike, it seems, are unhappy with the way Canada awards these tariff-free import quotas — “tariff rate quotas” or TRQs — to mostly Canadian-based processors. The Trump administration launched a formal complaint over the issue late last year, following Canada’s ratification of the USMCA trade agreement, successor to NAFTA. The Biden administration followed up with a late May salvo by triggering a dispute settlement panel, under the new trade agreement.
Dairy Farmers of Canada President Pierre Lampron insists that Canada’s handling of TRQs “is consistent with the terms” of the deal. “Thus we believe the Canadian government has a solid case to present before the panel and ultimately our right to ad- minister TRQs will be recognized,” Lampron told Farmers Forum.
Canada gave up a 4 % market share to the U.S. under the new agreement. However, South Dundas Dairy Farmer Nick Thurler suggested the Americans didn’t export as much into Canada as envisioned after that concession. He said they may be angling for more of the TRQs to be allocated to Canadian retailers rather than processors. But he pointed out that dairy prices south of the border are currently “quite high,” which also has the effect of reducing demand for those products in Canada.
In any case, Thurler, member of the Dairy Farmers of Ontario board, “doesn’t know why” Canada agreed to the terms of the USMCA. Canadians “didn’t get too much in return” for the domestic dairy market share given to the Americans, he explained.
Likewise, the CETA deal with the Europeans was a letdown to the Canadian dairy industry, according to Thurler. A reciprocal uptick in Canadian beef and pork exports to the European Union hasn’t materialized in exchange for their access to the dairy market here. The Europeans have instead thrown up barriers preventing entry of those Canadian products, he said.
