At a press conference yesterday at Reyncrest Farms, Congressman ChrisJacobs (NY-27) highlighted the need for full enforcement of the USMCA. Specifically, he is calling for Canada to adhere to their agreement as it relates to their tariff-rate quota (TRQ) policies.
“One of the major victories of the USMCA was the provisions that expanded Canadian dairy markets for American producers. However, now over a year after its implementation, Canada is still denying our farmers the access they are entitled to,” Jacobs said. “Specifically, Canada is setting aside a percentage of each TRQ for Canadian producers, in turn blocking American farmers from accessing these markets and millions of dollars in sales.”
Under the United States Mexico Canada Trade Agreement (USMCA) Canada is required to allow increased market access to U.S. dairy products in 14 different categories, ranging from milk to cheese to ice cream. Currently, Canada is setting aside a percentage in each of these categories solely for Canadian producers, effectively blocking American ones from the market and preventing them from realizing their full market share in Canada.
The tariff-rate quotas (TRQs) are a system that places one tariff rate on a quantity of an import under a certain level. After the quantity exceeds the set rate, the tariff increases. Canada’s work to set aside a percentage of their TRQs for Canadian processors undermines the ability of US producers to fully access Canadian markets as they are allowed under the USMCA.
Jacobs sent a letter to former United States Trade Representative (USTR) Lighthizer calling for a dispute panel to be convened to settle this issue. USTR Lighthizer initially convened the United States and Canadian governments in December to attempt to settle the dispute, this was unsuccessful. In June, the new USTR, Katherine Tai, convened a dispute panel – the most aggressive legal action taken to date to settle the trade dispute. The process can take months and is currently underway. Today, Jacobs sent a letter to Canadian Ambassador to the United States, Kirsten Hillman highlighting the issue and the need for a resolution.
“Canada adhering to the USMCA and allowing for its full implementation will have a huge impact on American dairy producers. In fact, the US International Trade Commission has estimated it could be over a $220 million gain,” Jacobs said. “With dairy representing a massive portion of the agriculture in my district, and the state of New York, swift enforcement of the USMCA has the potential to bring new economic opportunity and prosperity – I’ll keep fighting until our farmers are given access to what they deserve.”