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Dairy likely to highlight USMCA consultations

If there is no immediate resolution this week, dairy groups say the Biden administration should ask for a dispute settlement panel to handle the matter.

Trade ministers from Canada, Mexico, and the United States are scheduled to confer digitally on Monday and Tuesday in the first meeting of the USMCA’s Fair Trade Commission, with dairy expected to be the hot topic. U.S. dairy groups called on Sunday for the Biden administration to escalate an ongoing complaint against Canadian dairy quotas unless this week’s meeting produces results.

Krysta Harden of the U.S. Dairy Export Council said, “We need [U.S. trade representative Katherine Tai] to take bold action to ensure the U.S. dairy industry fully benefits from the hard-fought wins included in the USMCA.” The tri-national free trade agreement called on Canada to give wider access to U.S. dairy products. The Trump administration asked for dairy consultations last December, on grounds that Canada was not living up to its commitments.

If there is no immediate resolution this week, dairy groups say the Biden administration should ask for a dispute settlement panel to handle the matter. The panel is the next step under the USMCA for trade disagreements.

At a congressional hearing last week, Tai said, “We are using every tool available to make sure our existing agreements work and have a positive impact on real people. The United States-Mexico-Canada Agreement gives me confidence that this approach is worthwhile.”

The Fair Trade Commission was designed to oversee the implementation of the USMCA, assist in resolving disputes, and supervise the work of lower-level committees.

International Trade Minister Mary Ng of Canada said this week’s discussions would include “resilience of integrated supply chains, emphasizing the importance of strong labor and environmental protections, and mitigating the economic effects of climate change to ensure that North America emerges from the COVID-19 pandemic stronger, through an inclusive, sustainable recovery that works for everyone.”

Economy Secretary Tatiana Clouthier Carrillo will represent Mexico during the meetings online.

The USMCA, which preserved duty-free access for most U.S. farm products to Canada and Mexico, became effective last July 1. It was expected to result in a modest overall increase in U.S. agricultural exports. The pact called on Canada to adjust its tariff-rate quotas on dairy, poultry, and eggs, and to assign a fairer grade to U.S. wheat offered for import.

Canada and Mexico are responsible for one-third of U.S. food and agriculture trade worldwide.

U.S. homebuilders suggested ahead of the USMCA consultations that the Biden administration should remove the 9% tariff on softwood lumber from Canada, reported Reuters. Lumber prices have soared, the result of a housing boom and reduced U.S. production due to the pandemic. Tai said she would bring up the issue at this week’s meeting.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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