Following consultations with industry and DFC, on June 15th, the government announced interim Tariff Rate Quotas (TRQs) for CUSMA, which entered into force on July 1st, 2020. These TRQs establish how the import access under CUSMA is allocated by product category to parties within the supply chain such as processors and distributors. The majority of these new TRQs have been allocated to processors, similar to the current allocation of TRQs in place under CPTPP. Unlike CETA, there is no allocation for retail, which is something which DFC had advocated against with the government.
This is positive, as allocating the majority of TRQs to Canadian processors helps to ensure that more imported dairy products complement products produced in Canada, instead of duplicating them or directly competing with them. This decision reflects joint recommendations by Dairy Processors Association of Canada (DPAC) and Dairy Farmers of Canada on this issue.
Meanwhile, the second phase of the broader public consultation on the long-term allocation and administration of TRQs for the World Trade Organization (WTO), CETA, CPTPP, and CUSMA was put on hold in early May until further notice amid the COVID-19 pandemic. DFC has already met with officials from Global Affairs Canada to discuss the different proposed options and is carefully monitoring any next steps.