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US outlines key conditions for extending North American trade pact
American trade officials have presented their most detailed requirements yet for maintaining free trade with Canada, as negotiations over the USMCA agreement remain deadlocked. The demands, revealed during a Congressional hearing on Wednesday, target Canada's dairy policies, digital media laws, and provincial liquor bans.
Dairy market access remains top US priority
Washington is pressing Ottawa to dismantle its supply-management system for dairy, which restricts imports and keeps domestic prices elevated. US Trade Representative Jamieson Greer told lawmakers the current framework unfairly limits American dairy exports, despite Canada being a major buyer-importing $1.1 billion worth of US dairy products in 2024.
Canada's system imposes tariffs of up to 400% on foreign dairy once import quotas are exceeded, though those quotas have never been fully utilized. The US also accuses Canada of flooding global markets with subsidized nonfat milk solids, undercutting competitors. While Canadian officials insist supply management is non-negotiable, past USMCA reviews saw Ottawa grant greater access to American dairy at reduced tariffs.
Streaming and news laws under fire
Greer criticized Canada's Online Streaming Act, enacted in 2023, which mandates that platforms like Netflix and Spotify fund and promote Canadian content. The US argues the law discriminates against American tech and media firms, though Greer did not specify required changes.
A separate law, the Online News Act, has also drawn US ire. It compels companies such as Meta and Google to compensate Canadian news outlets for content shared on their platforms. Meta's response-blocking news access for Canadian users on Facebook and Instagram-has intensified tensions.
Provincial liquor bans add to trade friction
Most Canadian provinces, except Alberta and Saskatchewan, have banned American liquor in retaliation for US tariffs on Canadian metals, lumber, and autos. The boycott has hit US alcohol producers hard, contributing to a sharp drop in sales. Ontario Premier Doug Ford has vowed to maintain the ban until tariffs are lifted or USMCA is renegotiated.
Greer emphasized that restoring US liquor sales is a precondition for extending the trade agreement. The dispute traces back to sweeping tariffs imposed by former President Donald Trump, which Canada countered with its own trade barriers.
Additional US grievances
Beyond dairy and digital policies, Greer highlighted several other sticking points:
- Procurement rules: The US claims Ontario, Quebec, and British Columbia enforce discriminatory measures against American suppliers.
- Customs hurdles: Washington describes Canada's export registration process as overly complex for US businesses.
- Energy disputes: The US alleges Alberta's grid operator unfairly blocks Montana-based electricity providers from accessing the provincial market. Alberta denies the claim, citing reduced imports from Montana in recent years-though the state remains a net exporter to Alberta.
Alberta Utilities Minister Nathan Neudorf called the energy issue a "long-standing" dispute but affirmed the province's commitment to trade obligations.
Uncertain path forward
While Canada and Mexico seek to extend USMCA, Trump has hinted at withdrawing from the pact. Greer acknowledged the agreement's partial success but insisted on reforms for its continuation. Negotiations show no signs of resuming, leaving the future of North American trade in limbo.
