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Ottawa likely to face more trade battles

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Ottawa likely to face more trade battles after losing U.S. dairy dispute, lawyers say

Trading partners around the world have made no secret of their displeasure with Ottawa’s high tariffs on dairy imports

More countries are likely to pick fights with Canada over its protectionist dairy policies following a loss to the United States in a dispute over cheese imports, international trade lawyers said.

Trading partners around the world have made no secret of their displeasure with Ottawa’s high tariffs on dairy imports — a tactic used to shelter Canadian farmers from competition under the federal supply management system. Those allies, particularly in Europe and New Zealand, were no doubt paying close attention last week when the U.S. won a key ruling that could allow more American dairy brands to break into the Canadian retail market.

“When you say ‘dairy’ and ‘Canada,’ the world laughs,” said Mark Warner, a trade lawyer and former official at the Organisation for Economic Co-operation and Development (OECD). “The Canadians are going to have to say, ‘Hm, it’s not just the Americans that have a beef with us. It’s actually all of our trading partners.’”

The U.S. has been accusing Canada of playing tricks to water down the impact of its commitments under the United States-Mexico-Canada Agreement (USCMA), the pact that replaced the North American Free Trade Agreement in 2020. In the new treaty, Ottawa agreed to expand so-called tariff-rate quotas, which allow for a limited volume of American dairy products to cross into Canada without the regular tariffs.

American farmers heralded the larger duty-free quota in the new North American trade agreement as a victory in their long fight against supply management. But soon they were complaining again, because the U.S. dairy that Canadians were bringing over the border was mostly low value — mass-produced slabs of mozzarella for frozen pizzas, rather than fine chévre from Vermont goat herds.

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Source: Financial Post

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