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CUSMA Update: Canada-United States-Mexico Agreement signed by U.S. and Canada

December 12, 2019

On Dec. 10, 2019, the United States and Canada signed the Canada-United States-Mexico Agreement (CUSMA). The U.S. Congress must now ratify the agreement, after which Canada will move forward with ratification. Mexico ratified on June 20, 2019.

The earliest a CUSMA implementation bill could be adopted is mid-February 2020. However, due to the structure of the agreement, with Canada being the last country to finalize its legislation, the most optimistic scenario would see CUSMA coming into force on April 1, 2020. This could change, however, should there be any procedural or political delays in either country and we will keep you updated on timing as this process unfolds.

CUSMA will have three main impacts on the Canadian dairy sector:

  1. The United States is given market access through tariff-rate quotas on dairy;
  2. Milk classes 6 and 7 are eliminated;
  3. The setting of global export thresholds for the following three products: milk protein concentrate, infant formula and skim milk powder, above which export charges will be added on any additional exports at the global level.

Dairy Farmers of Ontario awaits ratification of the agreement to know how and when CUSMA will come into force, and the more specific impact it will have on the sector.

Dairy Famers of Can­ada (DFC) statement, Dec. 11, 2019:

“The signing of the Canada-United States-Mexico Agreement (CUSMA) is a sad chapter in Canada’s dairy industry and for Canadian exporters. The access to our country’s dairy market given to the U.S. represents a significant loss, the equivalent of the combined dairy production of New Brunswick and Nova Scotia. Market access is only the tip of the iceberg. Concessions include an oversight clause that gives the U.S. the ability to intervene in the administration of our domestic system. The concessions also give the U.S. the ability to impose the equivalent of a cap on global dairy exports which will limit Canada’s ability to export dairy products. Would the U.S. ever accept such terms?”

—Pierre Lampron, President, Dairy Farmers of Canada

 

Contact
media@milk.org

 

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