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Canada stops US milk invasion
Canada has scored a victory in a long-running trade dispute with the United States. A panel at the North American Free Trade Agreement concluded in 2020 agreed with the country in its opposition to the rapid admission of more American imports.
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Earlier, the US had scored a victory. In January 2022, the panel ruled that Canada was not doing enough to open the market to US imports. The Americans were allowed to gain up to a 3,5% share of the Canadian dairy market. For this purpose, they were allocated tariff quotas for various types of dairy products.
However, the Americans thought this was happening too slowly and believed that they should have more access to the Canadian dairy market even without the tariff quotas. Canada sees it differently and states that the Americans are too impatient. The defense was that if they first filled all their tariff quotas, there would be room to re-evaluate the agreements over time. The panel at the USMCA, the United States-Mexico-Canada Agreement, agrees.
It is very important to Canada to keep its own, highly regulated dairy market afloat, and to give its own farmers a relatively guaranteed livelihood. That would become uncertain if the country were to give completely free access to American dairy, which is produced much cheaper.
For now, the Trudeau government in Ottawa sees the panel's ruling as a major victory, but the question remains how long the protection of its own dairy farms and dairy industry can be maintained.