Letter to the Hon. Robert Lighthizer, U.S. Trade Representative, and the Hon. Sonny Perdue, Secretary of the Dept. of Agriculture - Schumer, Gillibrand reveal: Two months after new trade deal implementation, lingering concerns about Canada & Mexico dodging dairy trade commitments wring Upstate NY dairy farmers dry; senators call on Feds to ensure strict agreement to provide fair market access, helping NY dairy industry & local economies rebuild from pandemic

Letter

Dear Ambassador Lighthizer and Secretary Perdue:

With the U.S.-Mexico-Canada Agreement (USMCA) now in effect as of July 1, we write urging you to ensure that both Canada and Mexico are held accountable to their dairy trade obligations in the agreement. It is of particular importance that dairy farmers in New York and across the country -- many of whom are struggling as a result of this unprecedented economic crisis -- fully benefit from the expanded market access opportunities and the elimination of unfair practices under USMCA.

We have heard concerns from the New York dairy industry regarding Canada's recent allocation of tariff-rate quotas (TRQs) for U.S. exports of several categories of dairy products, including milk, cheese, and yogurt. While the new tariff-rate quota commitments were intended to provide U.S. dairy producers with greater access to Canada's dairy market, it is our understanding that Canada's announced TRQs place U.S. producers at a disadvantage and are inconsistent with the market access provisions secured in agreement. Canada cannot be allowed to evade its trade obligations in order to protect its tightly-controlled dairy market and must fairly administer its TRQs as agreed to under USMCA.

Another key issue is ensuring the full elimination of Canada's Class 6 and 7 milk price classification programs, which was a top priority of ours during the USMCA negotiations. As you are aware, Class 6 and 7 are market-distorting supply management programs that allow for the dumping of Canadian milk products onto the global market at artificially low prices, causing significant harm to New York dairy producers. While it was encouraging to see the elimination of these programs included in the final agreement, there are outstanding concerns from the U.S. dairy industry about Canada providing sufficient transparency on dairy pricing, which is critical for establishing a baseline against which the U.S. can evaluate Canada's new post-Class 6 and 7 pricing policies, as well as with how Canada implements its USMCA dairy export surcharge commitments. There must be vigilant monitoring to ensure Canada complies with its commitment to eliminate these programs with full transparency, and in a manner that does not reproduce the programs' harmful effects through different means.

Additionally, in a side letter accompanying USMCA, Mexico affirmed a list of more than 30 terms for cheese that would remain available as common names for U.S. cheese producers when exporting to Mexico. It is critical that our domestic producers continue to have the opportunity to sell products to consumers in Mexico using common cheese names and that New York dairy exporters do not lose the valuable market share they have spent years fighting for. As such, Mexico must translate its USMCA commitments into regulations in a way that ensures commonly-used cheese names specified in the agreement are respected.

Our hardworking dairy producers in New York and across the U.S. deserve to fully benefit from the provisions secured in USMCA. We therefore ask for your commitment to raise these concerns with your government counterparts in Canada and Mexico as soon as practicable and to take the appropriate enforcement measures going forward to ensure both countries' dairy trade obligations are upheld.

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