Edge Dairy Farmer Cooperative: Supports second trade dispute with Canada

GREEN BAY, Wis. — Edge Dairy Farmer Cooperative, one of the largest dairy co-ops in the country, reiterated its support today for U.S. trade officials who are doubling down on challenging the Canadian government over its allocation of tariff-rate quotas for dairy products.

U.S. Trade Representative Katherine Tai announced that the U.S. is triggering a second dispute settlement consultation under the United States-Mexico-Canada Agreement (USMCA) regarding additional practices deemed to be unfairly blocking key export opportunities for dairy farmers and processors.

A dispute settlement panel earlier found Canada was noncompliant with the USMCA in its use of the quotas (TRQs) for dairy, including not allowing U.S. exporters to ship directly to the lucrative retail sector. Through the course of the first dispute process, two other issues have arisen that trade officials are calling out ― the requirement that dairy quota applicants be active during all 12 months of a reference period, which would block particularly new applicants, and only allocating part of the TRQs for 2022.

“Edge is thankful for the continued vigilance of the Office of the U.S. Trade Representative in identifying Canada’s methods for skirting the dairy provisions in the USMCA. Commitments were made under the trade deal, and Canada needs to hold up its end of the bargain,” said Brody Stapel, president of Edge, which has aggressively pushed for enforcement action since the issue first arose nearly a year ago.

“Our farmers were meant to see major opportunities under USMCA ― an estimated 50 percent increase annually in the value of exports. Unfortunately, we’re still waiting. We can’t get the high-quality cheese from our members here in the Upper Midwest onto Canadian grocery store shelves. This remains a top priority for Edge, and we will continue to support trade officials in finding a path forward. A collaborative and robust trading relationship with our longtime partner is critical for both sides.”

Here are the disputed issues:

• Retailers, food service operators and some other eligible applicants are excluded from the TRQs. Instead, Canada is allocating the TRQs to entities that have little incentive to import, like processors.
   
• Applicants are required to be active during all 12 months of a 12-month reference period, potentially excluding otherwise eligible applicants, in particular new entrants.
   
• Canada has allocated only part of its dairy TRQs for the calendar year 2022 despite USMCA requirements that full allocation be done at the beginning of the year, and commitments to administer the TRQs in a transparent manner.