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Dairy market: Ottawa victory against Washington< /p>Open full screen

This is the second dispute resolution panel examining U.S. complaints that Canada unfairly favors processors over to milk producers. (Archive photo)

The Canadian Press

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Big victory for the federal government in its ongoing dispute with the United States over access to the Canadian dairy market: a settlement panel rejected complaints from the Office of the United States Trade Representative over the way the Canada allocates its dairy import quotas.

This is the second dispute settlement panel in three years that examines U.S. complaints that Canada unfairly favors processors over producers.

The first group's findings, released in December 2021, leaned heavily in favor of the United States, although Ottawa was still trying to present this as a victory.

US Trade Representative Katherine Tai said she requested a second panel because Canada failed to respond adequately to the first.

Canadian International Trade Minister Mary Ng offers latest findings as vindication of Ottawa's approach to quotas ;importation.

Canada is very satisfied with the findings of the dispute settlement panel, which are clearly all in Canada's favor, the minister said Ng in a press release.

This is good news for the Canadian dairy industry and for our supply management system.

A quote by Mary Ng, Canadian Minister of International Trade

Supply management, she said, ensures market stability and supports producers by offering them fair income for their work and investments.

Ottawa says Canada's dairy sector generated $8.2 billion in farm receipts and $17.4 billion in sales last year, supporting more than 70,000 production and processing jobs across the country.

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Not all American dairy products enjoy the same rights when they enter Canada. (File photo)

The conflict centers on how Canada allocates its dairy tariff rate quotas, or the quantities of certain dairy products that can enter Canada at lower duty levels under the terms of the Canada-U.S. Agreement. Mexico (CUSMA).

The first dispute resolution panel, launched in May 2021, largely agreed with the United States' complaint that Canada's strategy violated the terms of the agreement, known north of the border as CUSMA.

Ms. Tai's office felt compelled to call for a second group after the first made little difference.

Canada took commitments to the United States within the framework of CUSMA, Ms. Tai argued at the time. And the Biden-Harris administration is making sure to honor these commitments.

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Katherine Tai is representative to United States Commerce. (File photo)

Disputes and disagreements have become a recurring feature of CUSMA since it became the law of the land in the summer of 2020.

Canada and the United States jointly criticize Mexico for its energy policies, which they say unfairly favor domestic suppliers and threaten to undermine U.S. efforts to revive the energy industry green and fight climate change.

And Canada and Mexico jointly won an important victory in January, when a separate committee has spoken out against the U.S. interpretation of the rules that determine whether major auto parts are considered domestic or foreign.

The United States has remained silent about its intention to comply with this decision.

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