Image: CUSMA. Image credit: Official Facebook
Ottawa/CM: Canada has lost the first-ever dispute case to the U.S. under the new North American trade agreement when a three-member panel said that Canada had imposed unfair and complicated rules which violated its promise to allow more dairy imports to the U.S.
Dairy was one of the major issues in negotiating the new Canada-U.S.-Mexico Agreement on trade (CUSMA).
The U.S. reportedly said that if Canada does not comply with the ruling until Feb 3, the U.S. would penalize Canada to pay a tariff, equivalent to the value of the damage American dairy producers suffered.
This report was released to the countries in a full confidential version on Dec. 20.
On Tuesday a 53-page public version of the initial report was released.
Canada noted that the panel’s upholding Canada’s system of supply management of its dairy sector was a partial victory for the Canadian government.
Exporting more dairy was a top priority in the U.S. but being pressurized by producers concentrated in Central Canada new imports were prevented by the Canadian government.
The U.S. argued that Canada’s tighter controls were unfair as they blocked competition, and innovation, and can lead to higher prices for consumers.