SCHUMER, GILLIBRAND ANNOUNCE U.S. WINS USMCA DISPUTE WITH CANADA; RULING WILL ENSURE FAIR MARKET ACCESS, HELPING NY DAIRY INDUSTRY & LOCAL ECONOMIES REBUILD FROM PANDEMIC

Press Release

After concerns about Canada's allocation of tariff-rate quotas for U.S. exports of dairy products in June 2020 and again in September 2020 led to the Office of the U.S. Trade Representative taking its first-ever United States-Mexico-Canada Agreement (USMCA) enforcement action in December 2020, U.S. Senate Majority Leader Charles E. Schumer and U.S. Senator Kirsten Gillibrand announced that the USMCA panel has ruled in favor of the United States that Canada is breaching its USMCA dairy commitments. The senators said this ruling will allow Upstate New York dairy farmers, many who are still struggling from the economic impacts of the pandemic, to fully benefit from the expanded market access opportunities and will eliminate unfair practices that hurt their bottom lines.

"Dairy farmers are the lifeblood of the Upstate economy, and today's ruling is a massive win for them," said Senator Schumer. "Dairy farmers in New York and across the country are still being squeezed by the economic impacts of the pandemic, and now more than ever depend on stable and fair rules to compete equitably in the nearby Canadian market. This decision will ensure the Upstate New York dairy industry fully benefits from the USMCA agreement's expanded market access opportunities, unimpeded by unreasonable trade barriers, and will help our dairy farmers churn up profits and mitigate the huge losses they have suffered this year."

"Today is a huge win for New York's dairy farmers. Canada's violation of USMCA dairy provisions was putting New York's regional economies at risk, and this decision will hold our trading partners accountable and ensure equitable trading practices are upheld moving forward," said Senator Gillibrand. "Dairy is New York's primary agricultural product and this win is needed now more than ever as economic disruptions from the pandemic continue hurting industry. I will always work to ensure our dairy farmers have access to fair trade opportunities."

The senators explained that under USMCA, Canada agreed to an expansion of tariff-rate quotas (TRQs) for several categories of U.S. dairy products. TRQs are a system of tariffs negotiated between countries that allow a predetermined quantity of imports at a specified and often very low tariff rate. Imports above the predetermined quantity are subject to a higher tariff rate that typically prices U.S. dairy products out of the Canadian market. Because of this, securing fair access to Canadian dairy TRQs is vital to ensuring New York's farmers have equitable access to that market.

Schumer, supported by New York milk producers including Cayuga Milk Ingredients and O-AT-KA Milk Products, raised concerns in June 2020 that the unfair way Canada was allocating its TRQs weakened the intent of the USMCA and as a result, New York dairy farmers and exporters were unable to make full use of USMCA's benefits. The landmark decision found Canada is improperly restricting access to its market for U.S. dairy products in violation of its commitments.

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