More Steps Ahead in Canadian Dairy Challenge, Plus Mexico Awaits

This week’s trade ruling against Canada’s restrictive dairy import system in favor of the U.S. is not the end of the process. That ruling gives Canada until February 3rd to comply and still leaves unfinished U.S. efforts with Mexico.

The U.S. dairy industry is urging Canada to comply swiftly with a US-Mexico-Canada Agreement dispute panel ruling against its tariff rate quota restrictions on dairy imports. But, American Farm Bureau’s Senior Director of Congressional Relations Dave Salmonsen says that doesn’t mean it will, and if it doesn’t?

“The U.S. has the potential to retaliate. They’re granted that right to force Canada to come into compliance. That could take the form of putting tariffs on some of their imports, but from what I understand, what is being said, the idea is to have Canada come into compliance, to work it out, without resorting to retaliation.”

U.S. Trade Representative Katherine Tai brought the case against Canada after consultations with Ottawa failed and with support from more than 125 members of Congress. The U.S. argued that Canada reserves the bulk of its low-tariff quotas for Canadian dairy processors and denies TRQs to retailers.

At the same time, Salmonsen says talks with Mexico on biotech crops continue. “GMOs, and how they’re doing their approvals process, that’s still in the discussion phase, as far as I understand, but that’s going to be an issue that continues into 2022.”

The Biden Administration has set enforcement of USMCA, China Phase 1, and other trade deals as a top trade priority, though the American Farm Bureau and key Republicans from agricultural states charge it’s done little to advance new deals.