IM_Johnson_2022_0607.pub

On May 16, Canada’s trade minister Mary Ng stated in respect of the recently published CUSMA dairy TRQ allocation and administration policies: “We are confident that the new policies fully comply with the panel’s findings and its recognition that Canada has the full discretion to administer its TRQs under CUSMA in a manner that supports Canada’s supply management system for dairy.” US Trade Repres. [...] To date, we have not seen the promises by Canada in the USMCA fully realized.” The US has now followed through with a formal request for consultations, objecting to Canada’s “new policies” on multiple grounds. [...] Only “processors, further processors and distributors” are treated as “eligible applicants” in the new policies, with retailers, food service operators and other importers excluded despite CUSMA defining “eligible applicant” broadly as “an applicant active in the Canadian food or agriculture sector.” The request identifies other aspects of the “new policies” that the US maintains are inconsistent. [...] If a CUSMA panel agrees with the US and the dispute is not resolved within 45 days of receipt of the panel’s final report, the US may suspend CUSMA benefits of “equivalent effect.” While CUSMA requires that the US attempt to suspend benefits in the same sector covered by the dispute (dairy products), the US may suspend benefits in other sectors if the US does not consider suspension in the same se. [...] However, each TRQ represents a commitment by Canada to duty-free trade up to the prescribed annual volume of imports of the dairy product in question.