On December 9, 2020, the United States took the initial step in the first formal trade dispute under the newly minted (July 1, 2020) Canada-United States Mexico Agreement (CUSMA). The U.S. Trade Representative (USTR) made a formal request for consultations with respect to Canada’s import limits on a variety of dairy products, claiming that these measures unfairly restrict U.S. dairy farmers’ access to the Canadian market contrary to CUSMA Article 3.A.2 of CUSMA.[1] Pursuant to CUSMA Chapter 31, the United States may request the establishment of a dispute settlement panel if the matter is not resolved by consultations.
While Canada has faced great pressure from the United States, the European Union and other trade partners to dismantle supply management for decades, it has operated under the cover of a well-established trade law exception for almost 75 years. The original 1947 GATT included an important exception to the Article XI prohibition of non-tariff restrictions (import ba