The two countries are at odds over the granting of tariff quotas provided for in the USMCA Free Trade Agreement (Agreement between the United States, Mexico and Canada), a mechanism that imposes zero or low tariffs on imports of certain products, up to a certain amount .

Washington has already used treaty provisions to end Canada’s milk quotas. And the government won its case when, in early January, the Special Committee on Settlements found those quotas to be inconsistent with USMCA regulations.

However, trade restrictions on the Canadian side do not appear to have been lifted.

“The United States is requesting the initiation of a new arbitration process to resolve disputes provided for under the USMCA Agreement on Canada’s Dairy Tariff Quotas,” the Diplomatic Mission for Commerce to the White House announced in a press release.

The diplomatic mission states that it has “identified additional aspects in Canada’s actions that appear to contradict Canada’s obligations under the agreement,” adding that “US concerns have only increased.”

“Rather than working to meet its commitments, Canada continues to implement new dairy policies that conflict with the USMCA agreement,” Trade Ambassador Katherine Tai said in the statement.

“Canada continues to violate its obligations under the agreement by refusing to lift its trade restrictions on US dairy products,” said US Secretary of Agriculture Tom Vilsack.

This is Washington’s third use of this instrument provided for in the treaty.

At the end of May, the United States primarily accused Canada of allocating much of its dairy quota to Canadian processors, who are more inclined to import cheap American cheese, effectively excluding other American products.

As early as December 2021, Washington called the arbitration board provided for in the treaty, which concluded last January that Canada’s practice of holding tariff quotas for the exclusive use of milk processors was incompatible with the “AEUMC”.