The American administration announced on Tuesday its intention to launch a new conciliation procedure against Ottawa, within the framework of the North American Free Trade Agreement, concerning the tariff quotas for dairy products, subject to dispute for many months between Canada and the United States.
The two countries clash over the granting of tariff quotas, provided for in the free trade treaty CUSMA (Canada, United States, Mexico agreement), a mechanism imposing a zero or low customs duty on imports of certain products up to a specified amount.
Washington has already used treaty provisions to denounce Canadian milk quotas. And the administration won its case when, in early January, the special settlement group found that these quotas were contrary to the provisions of the CUSMA.
However, trade restrictions do not seem to have been lifted on the Canadian side.
“The United States is requesting the launch of a new conciliation procedure for the settlement of disputes provided for by the CUSMA agreement concerning Canada’s tariff quotas for dairy products”, announced the diplomatic mission for Trade, attached to the White House, in a press release.
The diplomatic mission specifies that it has “identified additional aspects in the Canadian measures which appear to contradict Canada’s obligations under the agreement”, adding that “the concerns of the United States have only increased”.
“Rather than working to meet its obligations, Canada persists in implementing new policies regarding dairy products that are contrary to the CUSMA agreement,” denounced Trade Ambassador Katherine Tai, quoted in the press release.
“Canada continues to violate its obligations under the agreement by refusing to remove its trade restrictions on US dairy products,” said US Secretary of Agriculture Tom Vilsack.
This is the third recourse by Washington to this device provided for by the treaty.
At the end of May, the United States notably accused Canada of granting a majority of the quotas provided for dairy products to Canadian processors, who are more inclined to import cheap American cheese, effectively excluding other American products.
In December 2021, Washington had already appealed to the settlement panel provided for in the treaty, which had concluded last January that Canada’s practice of maintaining reserves of tariff quotas for the exclusive use of dairy processors was inconsistent with the ‘ACEUM.