The second conciliation procedure launched within the framework of the North American Free Trade Agreement (USMCA) ended Friday with a report in favor of Canada in the conflict between it and the United States over product quotas dairy industry which has lasted for almost three years.
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The special settlement group, set up last January at the request of Washington to try to find a solution to the trade conflict, estimated, by two votes to one, that the Canadian rules linked to dairy product quotas did not contravene the provisions of the USMCA, according to a press release from the services of the United States Trade Representative (USTR).
According to Canada, dairy quotas could not affect a number of sectors, such as retail or catering companies, which the United States disputes, saying it penalizes American companies.
The American representative, Katherine Tai, declared herself “very disappointed” by the conclusions of the report, saying that “the United States continues to have serious concerns about the way in which Canada implements the rules relating to the conditions of access to the dairy products market under the agreement.
Unsurprisingly, Canada, on the other hand, declared itself “very satisfied” with the conclusions of the report.
“This is good news for the Canadian dairy industry and for our supply management system,” said Canadian International Trade Minister Mary Ng, “the Government of Canada will continue to preserve and defend the system Canadian supply management system, which supports producers by giving them the opportunity to receive fair income for their work and investments.
The two countries are clashing over the granting of tariff quotas provided for in the agreement. This mechanism imposes a zero or low customs duty on imports of certain products up to a specified quantity.
Washington denounces the fact that a majority of these quotas are granted to Canadian manufacturers, who are inclined to import cheap American cheese, effectively excluding other American products.
This is the second time the United States has used a settlement panel in this dispute. The first, established in May 2021, concluded, in January 2022, that the milk quotas adopted by Canada were contrary to the provisions of the free trade agreement.
But “the Canadian government’s revised measures have not resolved the problem,” Ms. Tai repeated.
“We will continue to work to resolve this issue with Canada and we will not hesitate to use the tools available to impose the conditions of the agreement and ensure that American workers, businesses and farmers benefit fully from the USMCA,” he said. she added.
The United States had requested consultations with Canada on this subject in May 2022, then again in December. Discussions on January 17 between the two countries did not allow any progress.
This conflict was the first after the USMCA, the North American free trade agreement signed by former President Donald Trump, replaced NAFTA, which was signed in 1994, on July 1, 2020.
