<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; line-break: after-white-space;" class=""><div class=""><div style="margin: 0in; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif;" class=""><a href="https://www.wsj.com/articles/u-s-initiates-trade-dispute-against-canadian-dairy-industry-11621966202" style="color: rgb(5, 99, 193);" class="">https://www.wsj.com/articles/u-s-initiates-trade-dispute-against-canadian-dairy-industry-11621966202</a><o:p class=""></o:p></span></div></div><div class=""><br class=""></div><p class="MsoNormal" style="margin: 0in 0in 6pt; font-size: 11pt; font-family: Calibri, sans-serif; line-height: 12pt; vertical-align: baseline;"><b class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">U.S. Initiates Trade Dispute Against Canadian Dairy Industry</span></b></p><div style="margin: 0in; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif;" class="">By Josh Zumbrun<o:p class=""></o:p></span></div><div style="margin: 0in; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-family: "Times New Roman", serif; font-size: 12pt;" class="">5/25/21</span></div><div style="margin: 0in; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif;" class=""> </span></div><div style="margin: 0in; line-height: 20.25pt; vertical-align: baseline;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">The Biden administration initiated a dispute process against the Canadian dairy industry, triggering the formal dispute mechanism of the <a href="https://www.wsj.com/articles/usmca-takes-effect-but-north-american-trade-tensions-remain-11593604807?mod=article_inline" target="_blank" style="color: rgb(5, 99, 193);" class="">new U.S.-Mexico-Canada Agreement</a> for the first time.<o:p class=""></o:p></span></div><p style="margin-right: 0in; margin-bottom: 12.75pt; margin-left: 0in; line-height: 20.25pt; vertical-align: baseline; overflow-wrap: break-word; font-variant-ligatures: normal; orphans: 2; widows: 2; text-decoration-thickness: initial;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">The U.S. dairy industry has long complained about policies in Canada that prevent sales in their market, and the issue has won the support of many members of Congress who represent the major dairy-producing states. Canada’s dairy protection was one of the key sticking points of the negotiations over the USMCA which was agreed to in 2018, and the U.S. dispute amounts to a formal accusation that Canada isn’t living up to the terms of the agreement.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 12.75pt; margin-left: 0in; line-height: 20.25pt; vertical-align: baseline; overflow-wrap: break-word;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">“Launching the first panel request under the agreement will ensure our dairy industry and its workers can seize new opportunities under the USMCA to market and sell U.S. products to Canadian consumers,” said Katherine Tai, the U.S. trade representative and President Biden’s top trade adviser, on Tuesday.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 12.75pt; margin-left: 0in; line-height: 20.25pt; vertical-align: baseline; overflow-wrap: break-word;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">The U.S. alleges that Canada has used a complex system of tariff-rate quotas that sets aside a share of the dairy market exclusively for Canadian dairy processors, and that the system is in violation of what Canada agreed to in 2018.<o:p class=""></o:p></span></p><div style="margin: 0in; line-height: 20.25pt; vertical-align: baseline;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">The complaint predates the Biden administration—in December of 2020, the Trump administration <a href="https://www.wsj.com/articles/u-s-says-canada-shields-its-dairy-market-in-violation-of-trade-pact-11607556196?mod=article_inline" target="_blank" style="color: rgb(5, 99, 193);" class="">filed the initial complaint</a>, and the U.S. and Canada discussed the complaint in December, but failed to resolve the issue.<o:p class=""></o:p></span></div><p style="margin-right: 0in; margin-bottom: 12.75pt; margin-left: 0in; line-height: 20.25pt; vertical-align: baseline; overflow-wrap: break-word;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">The U.S. is now escalating the dispute by requesting the creation of a formal dispute settlement panel. The panel would hold hearings to understand the issue and release a report later this year. If the U.S. prevails, Canada would then have to bring its practices into compliance. If they didn’t, the U.S. would eventually be able to impose tariffs.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 12.75pt; margin-left: 0in; line-height: 20.25pt; vertical-align: baseline; overflow-wrap: break-word;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">“Canada is disappointed that the United States has requested a dispute settlement panel,” said Canada’s trade minister Mary Ng.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 12.75pt; margin-left: 0in; line-height: 20.25pt; vertical-align: baseline; overflow-wrap: break-word;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">“We are confident that our policies are in full compliance,” with the trade agreement, she said. “We will vigorously defend our position during the dispute settlement process.”<o:p class=""></o:p></span></p><div style="margin: 0in; line-height: 20.25pt; vertical-align: baseline; overflow-wrap: break-word;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">The move is part of a series of steps the Biden administration has taken to enforce the USMCA. Earlier this month, <a href="https://www.wsj.com/articles/u-s-asks-mexico-to-probe-alleged-union-vote-tampering-at-gm-plant-11620823153?mod=article_inline" target="_blank" style="color: rgb(5, 99, 193);" class="">the U.S. initiated a review of a union vote</a> at a <a href="https://www.wsj.com/market-data/quotes/GM" style="color: rgb(5, 99, 193);" class="">General Motors</a><span class="company-name-type"><span style="border: 1pt none windowtext; padding: 0in;" class=""> Co.</span></span> truck factory, a separate type of enforcement action. Also this month, U.S. and Mexican labor groups <a href="https://www.wsj.com/articles/unions-say-mexican-auto-parts-maker-is-violating-trade-deal-11620666639?mod=article_inline" target="_blank" style="color: rgb(5, 99, 193);" class="">filed a complaint against a Mexican auto-parts manufacturer</a>.<o:p class=""></o:p></span></div><p style="margin-right: 0in; margin-bottom: 12.75pt; margin-left: 0in; line-height: 20.25pt; vertical-align: baseline; overflow-wrap: break-word;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">“These enforcement actions reflect the Biden-Harris administration’s deep commitment to enforcing the USMCA and to ensuring that U.S. trade policy works for America’s workers,” the office of the USTR said.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 12.75pt; margin-left: 0in; line-height: 20.25pt; vertical-align: baseline; overflow-wrap: break-word;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">According to the International Trade Commission, the USMCA—if implemented as negotiated—would boost U.S. dairy exports by more than $314 million a year.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 12.75pt; margin-left: 0in; line-height: 20.25pt; vertical-align: baseline; overflow-wrap: break-word;" class=""><span style="font-size: 12pt; font-family: "Times New Roman", serif; color: rgb(51, 51, 51);" class="">Canada’s dairy producers have long fought against opening the market. The country has around 11,000 commercial farms that hold substantial political sway because they are located in a politically important region: rural central Canada, especially French-speaking Quebec.</span></p><div class="">
Arthur Stamoulis<br class="">Citizens Trade Campaign<br class="">(202) 494-8826<br class=""><br class=""><br class=""><br class="">
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