Press release:
Continuing their tireless advocacy for New York’s hard-hit dairy farmers in the midst of the COVID-19 crisis, U.S. Senator Charles E. Schumer and U.S. Senator Kirsten Gillibrand today urged U.S. Trade Representative Robert E. Lighthizer and U.S. Secretary of Agriculture Sonny Perdue to ensure both Canada and Mexico are held accountable to their trade commitments under the United States-Mexico-Canada Agreement (USMCA), which entered into force earlier this year on July 1st.
Specifically, the senators pointed out three harmful dairy trade practices, including Canada’s recent allocation of tariff-rate quotas (TRQs) for U.S. exports of several categories of dairy products, Canada’s Class 7 pricing program (Class 6 in Ontario) and lack of transparency in milk-pricing regulations, and the need for Mexico to translate its USMCA commitment of safeguarding more than 30 common cheese names for American products, into regulations.
“New York’s dairy farmers are the lifeblood of the Upstate economy, but unfortunately they have been squeezed by the economic effects of the COVID-19 crisis,” Senator Schumer said. “That is why I am calling on Ambassador Lighthizer and Secretary Perdue to do everything in their power to ensure that Canada and Mexico abide by their dairy trade obligations, allowing Upstate New York dairy farmers to freely sell their product – as agreed to in the new trade agreement with both countries, the USMCA.
"The trade deal entered into force two months ago, and there can be no further delays to ensuring our New York dairy farmers can sell their products, unimpeded by unfair trade barriers, into Canada and Mexico and churn up profits that mitigate the huge losses they have suffered this year.”
“Dairy is New York’s primary agricultural product and our rural economies depend on the survival of the industry, but poor implementation of USMCA provisions on dairy will harm our dairy farmers and make it even harder for them to recover from this crisis,” Senator Gillibrand said. "Secretary Perdue and USTR Ambassador Lighthizer must hold our trading partners accountable and ensure equitable trading practices for America’s dairy farmers.”
Schumer and Gillibrand explained that under USMCA, Canada agreed to an expansion of tariff-rate quotas (TRQs) for several categories of U.S. dairy products. However, recently, it has come to the senators’ attention that Canada’s recently-released TRQ allocations weaken the intent of the USMCA and will prevent New York dairy farmers from fully benefitting from the agreement’s expanded market access opportunities.
Additionally, the senators said that under the new trade deal, Canada agreed to eliminate Class 6 & 7 pricing within six months. However, as Schumer revealed in June, Dairy Farmers of Ontario (DFO), which represents approximately 4,000 Canadian dairy farmers, requested that Ontario’s tribunal which provides an avenue of appeal on agriculture issues grant restricted access to DFO’s pricing regulations.
The senators argued that with only a few months left until the USMCA six-month deadline to eliminate Class 6 & 7, the lack of transparency and timing of DFO’s request in combination with the new TRQs, raises questions about whether or not Canada is seeking to circumvent its dairy commitments in USMCA.
The senators also noted that U.S. dairy farmers secured a major victory in the USMCA when 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, but with uncertainty remaining over how Mexico will translate its commitment to protect these common cheese names into regulations, U.S. dairy farmers are in danger of losing out on the market share they spent years developing.
