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For months, Lighthizer has been under significant bipartisan pressure from Congress to address the issue. A group of 25 senators wrote to Lighthizer in August, asking him to use to measures laid out in USMCA “to hold our trading partners accountable to their trade commitments.”
This week’s U.S. media reports suggested that Lighthizer could kickstart USMCA’s formal dispute resolution process soon. The U.S. move represents the first enforcement action under the new trade deal.
They may not be following the spirit of the agreement but I don’t see how they’re violating the letter of the agreement
Nicolas Lamp, former WTO dispute settlement lawyer
In the letter, the U.S. senators said Canada’s method of allocating the tariff-rate quotas (TRQs) has restricted U.S. industry from extracting full value from the extra volume it is now able to send into Canada.
“Canada must administer its TRQs fairly and in a manner consistent with its obligations under USMCA,” the letter reads. “It cannot be allowed to administer TRQs in a manner that discourages utilization or restricts the ability of the U.S. dairy industry to completely fill the established TRQs at advantageous price points.”
Canadian International Trade Minister Mary Ng’s office declined to comment on the reports of the coming action. But spokesperson Youmy Han denied allegations that Canada isn’t making good on its dairy commitments under the agreement.
“Canada’s administration of its dairy TRQs is in full compliance with its commitments under the new NAFTA,” she said in an email.
Lamp at Queen’s said the dispute over whether Canada is in compliance is “a really tricky” question.
“They may not be following the spirit of the agreement but, so far, I don’t see how they’re violating the letter of the agreement,” he said.
The U.S. Trade Representative’s office did not respond to multiple requests for comment on Tuesday.
