https://www.cbc.ca/news/world/dairy-dispute-panel-1.6303769
U.S. defeats Canada in first dispute under new North American trade pact
The issue is dairy. U.S. says Canada not fairly implementing changes it promised, and could face tariffs
What's new
Canada has lost the first-ever dispute case under the new North American trade agreement, with a panel siding with the U.S. and saying Ottawa flouted part of its obligation to open the dairy market.
The three-member panel — made up of a Uruguayan diplomat who was once ambassador to Canada, a Canadian trade lawyer based in the U.S., and a U.S. trade lawyer named to the panel by Canada — agreed that Canada violated its promise to allow slightly more dairy imports by imposing unfairly complicated rules.
The U.S. says Canada now has a few weeks to comply with the ruling, or face the possibility of a trade penalty such as a tariff.
The finding comes amid a succession of trade disputes between the countries that risk souring the bilateral relationship.
"We prevailed — as we thought we would," a senior official in the U.S. Trade Representative's office told reporters in a briefing Tuesday.
"Now the goal is to work with Canada.… The end goal is not to put retaliatory tariffs in place."
The report was released to the countries in a full confidential version just before the holidays, on Dec. 20; a 53-page public version was released Tuesday.
The Canadian government also claimed a partial victory: It noted that the panel otherwise upheld Canada's system of supply management of its dairy sector.
What's the context
Dairy was one of the hardest-fought issues in negotiating the new Canada-U.S.-Mexico Agreement on trade (CUSMA), and was resolved in the final days of negotiating.
The Canadian government worked to prevent new imports, under pressure from producers concentrated in Central Canada.
They argued that Canada's tightly controlled system allows for stable farming communities without the wild price fluctuations that have periodically battered U.S. farms.
For the U.S., exporting more dairy was a top priority.
Its allies argued that the tight Canadian controls unfairly shut out competition, and innovation, and can lead to higher prices for consumers.
In the end, the U.S. gained a small opening.
A series of measures in Chapter 3 of the new trade agreement allowed the U.S. some additional exports to the tune of more than three per cent of Canada's market.
But when it came time to implement the agreement, Canada left domestic processors in charge of allocating import permissions, known as tariff-rate quotas.
This angered the U.S. industry and government: both the Trump administration and the Biden administration moved forward with a case against Canada.
They argued that by giving Canadian producers control over 80 per cent of the import quotas they created an undue hurdle to cross-border sales.
One USTR official put it this way in Tuesday's briefing: an American producer would hope to talk directly to their customer in Canada, say a grocery store, about import rights, instead of their competitors.
He said those buyers in Canada, and their customers, have an incentive to allow imports to flow — unlike the producers.
The first panel decision under the new trade pact agreed with the U.S.; it said Canada violated Article 3.A.2.11(b) of the agreement, which says tariff-rate quotas should not be allocated to producer groups.
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What's next
The U.S. says Canada has 45 days to comply, from the time it received the confidential panel report. In other words, until Feb. 3, 2022.
After that, the U.S. says it would have the right to impose penalties — perhaps a tariff.
The scope of that penalty would have to be equivalent to the value of the damage allegedly done to American dairy producers.
It would be up to the U.S. to calculate that dollar amount, and if Canada disagrees it could further challenge the U.S. calculation.
"Of course we hope not to go down that path," said a U.S. official at Tuesday's briefing. "We obviously want to talk to them. And find a positive solution to the dispute."
The Americans at the briefing stressed that the U.S. otherwise has a great relationship with Canada, in other areas.
However, this dispute decision comes at a stormy moment in the relationship.
Canada has, itself, threatened to suspend pieces of the new trade deal that are dear to the U.S.
Ottawa is furious about Buy American-type provisions related to electric vehicles in a large budget bill and promising retaliation if the idea proceeds.
That separate dispute is currently in limbo: one senator, Joe Manchin, has blown up talks over the budget bill and wants to start all over.
The Canadian government said in a statement that it has "taken note" of the decision, takes its obligations seriously under trade agreements and will work with the Canadian dairy industry on next steps.
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https://www.youtube.com/watch?v=-cFOKT6TlSE&ab_channel=Rogerstv
May I suggest a move to Kazahkstan.
https://www.cbc.ca/news/world/kazakhstan-fuel-protests-1.6281653
https://www.cbc.ca/news/canada/new-brunswick/fundy-royal-riding-profile-1.3274276
or how 'bout that "Canadian trade lawyer based in the U.S" ? How fixed is that by the USA ?
more like as the cons would say, "let's sign anything America wants"
That net export pipeline is for the benefit/interest of all Canadians, and NOT Americans.
A country that can not be largely self-sufficient, and a net exporter, is doomed to remain a profitless fetcher of raw materials at cheap firesale prices, while it's superpower neighbour to the south laughs at us.
Is that what Canada has become.?
When Mulroney was trying to sell NAFTA to Canadians, Trudeau (senior) tried to warn us that trying to make any "fair" deal like NAFTA with America, is like a minnow trying to make a deal with a shark.
As today proves. Trudeau(senior) was prophetically correct.
You want competition from imported products? Nothing prevents you from buying imported US dairy products or European cheese, it is available, I saw some the other day at a large surface warehouse.
There is a very famous pricey Canadian outdoor clothing company that sells both in Canada and the US. Why is it that their products are cheaper in the US than in Canada? Friends of mine have said that they saved 200$ on an outdoor jacket by purchasing it in the US...
The quota system is country wide, not just Qc. It was created to protect farmers from the vagaries of Mother nature and will become more important with climate change. Look at what happened in BC: severe droughts, forest fires, flooding, cold snaps. Dairy producers in BC have had a very difficult year and you want to flood the BC market with US imports? That is the best way to run the dairy producers into the ground.
How many of you want local products, are against factory farming??? And by factory farming I mean dairy farms that have thousands of animals, not a few hundred.
Milk is one commodity that is local, transportation of milk over long distances isn't exactly ideal because milk doesn't freeze well. Look at the milk in your fridge, where is it from? Your own province. Prices of dairy are also local, they are not the same from province to province.
But but Harper is just such a lazy 'argument'...
(and when did Canada buy Stelco , anyway? Or did Stephen Harper personally own it?)
My favourite part about the "But Harper" argument is that our current PM loudly and repeatedly has stated he will be nothing like the former PM.
Yet time and time again the best defense they can come up with for most of his actions seems to be "Harper did it too." Which isn't helping the side of the argument they think it is.
Vaccines?
you will if it's not labelled
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