Agriculture
Dairy tariff-rate quotas, the resolved genetically engineered corn dispute, and sanitary and phytosanitary enforcement anchor one of the most economically significant and legally contested areas of the 2026 joint review.
Last substantive update: August 10, 2026 · Next scheduled events: Section 338 tariffs on covered Canadian goods, Aug. 19, 2026 · Douglas, AZ cattle-port reopening, Aug. 24, 2026 · ← Back to Review Watch
No change to the current USMCA agriculture rules has been identified as legally effective as of July 26, 2026. Current obligations remain governed by USMCA Chapter 3 (Agriculture), Annex 3-A and Appendix 3-A.2, Chapter 9 (Sanitary and Phytosanitary Measures), Chapter 11 (Technical Barriers to Trade), and each country’s domestic implementing law unless and until a legally effective change is adopted.
Everything a compliance professional needs before the details.
North American agricultural trade is highly integrated and commercially significant. Mexico was the largest U.S. agricultural trading partner in 2025 at roughly $74.5 billion in two-way trade, with Canada close behind at roughly $67.5 billion. Agriculture is also responsible for two of USMCA’s most consequential state-to-state disputes to date: Canadian dairy tariff-rate quotas and Mexico’s genetically engineered corn restrictions. Any review outcome reaches directly into market access, SPS compliance, and origin documentation for agricultural goods.
The U.S. declined to renew USMCA in its current form on July 1, 2026, triggering annual reviews through 2036. A Chapter 31 panel ruled against Mexico on December 20, 2024, finding its genetically engineered corn measures inconsistent with multiple SPS obligations. A second U.S.–Canada dairy TRQ panel largely rejected U.S. claims in November 2023, following an earlier 2021 panel that ruled against Canada’s processor-reserved quota pools. The third U.S.–Mexico bilateral round concluded in Mexico City on July 23, 2026, with agriculture named as a formal agenda topic and a fourth round scheduled for Washington in September 2026.
The treaty text is unchanged, but the operating environment shifted materially during the week of July 20. Three Section 338 proclamations imposed an additional 50 percent duty on listed Canadian goods, including dairy, effective August 19, 2026 and expressly independent of USMCA origin. USTR issued FY 2027 sugar tariff-rate quota allocations. USDA scheduled a phased reopening of southern cattle ports beginning August 24, 2026. FDA expanded a Cyclospora outbreak investigation tied to iceberg lettuce sourced from central Mexico.
Reporting and stakeholder testimony point to possible U.S. pressure for more prescriptive Canadian dairy TRQ allocation language, minimum allocations for distributors and retailers, and stronger fill-rate requirements. Separately, seasonal-produce trade-remedy reforms affecting Mexican fruit and vegetable exports have circulated as a political proposal. ICPA has not located enacted text for either and has flagged them below as reported, not confirmed.
Potential areas of change include Canadian dairy TRQ administration rules, treatment of biotechnology and gene-edited products, seasonal and perishable-produce trade-remedy standards, country-of-origin labeling for meat and livestock, pesticide and maximum-residue-limit divergence, and cooperation mechanisms for animal-health emergencies such as New World screwworm. None of these have been adopted as legally effective changes.
Confirm current TRQ utilization, SPS certificate requirements, and origin documentation for agricultural shipments; monitor animal- and plant-health emergency restrictions that can shift border treatment quickly regardless of the broader review. Dated items now on the calendar:
- Map Canadian-origin SKUs against the three Section 338 annexes ahead of August 19, 2026
- Confirm FY 2027 sugar TRQ documentation and entry timing before October 1, 2026
- Prepare inspection and pre-clearance protocols for the August 24, 2026 Douglas, AZ reopening
- Verify current Mexican requirements before shipping live animals southbound
- Review recall, traceback, and customer-notification procedures for Mexico-origin produce
Do not revise TRQ compliance strategy, labeling programs, or biotechnology approval assumptions based on reported figures or stakeholder proposals alone.
Official government actions and confirmed events relevant to agriculture. None of these amends the USMCA text.
A Chapter 31 panel found that Article 3.A.2.6(a) did not prohibit Canada from limiting TRQ applicants to processors, distributors, and further processors, and rejected the claim that Canada’s market-share allocation system violated Article 3.A.2.11(b). Canada’s current dairy TRQ administration reflects this outcome; no further Chapter 31 proceeding on the issue has been located as of July 26, 2026. See Disputes & Panel Decisions.
A Chapter 31 panel found Mexico had not conducted a qualifying risk assessment and that its 2023 decree restricting genetically engineered corn was more trade restrictive than necessary, in violation of multiple SPS obligations. ICPA has not located a published compliance measure or U.S. assessment of full compliance as of July 26, 2026. See Disputes & Panel Decisions.
Three presidential proclamations impose an additional 50 percent duty on listed Canadian goods covering dairy, alcoholic beverages, and motor vehicles, effective 12:01 a.m. ET on August 19, 2026. The duties apply regardless of whether a good originates under USMCA. Energy, potash, goods already subject to Section 232 duties, and certain other categories are excluded. The dairy proclamation grounds the action in Canada’s cheese tariff-rate quota eligibility criteria under USMCA compared with its treatment of EU cheese under CETA. The motor vehicle proclamation is covered on the Automotive page.
USTR listed agriculture among the formal agenda topics for the Mexico City round, alongside steel and aluminum, automobiles, economic security, labor, and electronic payment services. The July 23 joint statement from Ambassador Greer and Secretary Ebrard directs both teams to convene a fourth bilateral negotiating round in Washington, D.C. in September 2026. No negotiating text has been published. Canada is not party to this bilateral track.
USTR set the FY 2027 raw cane sugar in-quota quantity at 1,117,195 MTRV, allocating 1,061,202 MTRV by country and reserving 55,993 MTRV for allocation before October 1, 2026. Canada receives 10,300 MTRV and Mexico 2,954 MTRV of the 22,000 MTRV refined sugar TRQ, both unchanged from FY 2026. Allocations to net sugar importers are conditioned on verification of origin. This is WTO quota administration, not a USMCA action, but it fixes documentation and entry-timing requirements for the quota year opening October 1, 2026.
USDA will open the Douglas, AZ port of entry to cattle trade beginning August 24, 2026, contingent on Mexico’s adherence to the joint action plan on New World screwworm, while beginning operational steps toward later openings at Santa Teresa and Columbus, NM. Every animal will undergo full USDA inspection, and cattle must originate from approved low-risk areas of Sonora or Chihuahua. USDA retains discretion to pause openings if risk increases. Southbound movement is separately constrained: Mexico has suspended imports of several U.S. live-animal categories following screwworm detections in the United States.
FDA and CDC expanded the outbreak to nine states, reporting 1,947 laboratory-confirmed infections, at least 98 hospitalizations, and no deaths, with illness onset dates from June 22 to July 20, 2026. Taylor Farms de Mexico removed all iceberg lettuce sourced from central Mexico from the U.S. market on July 17 and initiated a recall covering retail and food-service distribution. FDA increased border screening. A product sample initially reported positive was subsequently identified as a false positive; the recall rests on traceback and epidemiological data rather than a positive product test. Taylor Farms has voluntarily suspended all production at its central Mexico facility pending an independent food-safety review, and reports no confirmed positive product samples as of July 24, 2026. These figures are superseded by FDA’s August 5, 2026 update; see SPS, Biotechnology & Compliance.
Agriculture Secretary Brooke Rollins visited the livestock inspection facilities at the Douglas, Arizona port of entry on July 29 and announced a $25 million USDA commitment for a new sterile fly dispersal facility in Arizona to strengthen the long-term New World screwworm response. The facility will join existing sterile fly operations in Texas, Mexico, and Panama; site selection in the Douglas area is underway with the Arizona Department of Agriculture. Rollins also outlined preparedness measures ahead of the port’s planned August 24 reopening to Mexican cattle under the phased plan USDA announced July 24. USDA press release, Jul 29 ↗
Agriculture is a critical review area because North American agricultural trade is highly integrated and already responsible for two of USMCA’s most important state-to-state disputes: Canadian dairy tariff-rate quotas and Mexico’s restrictions on genetically engineered corn. The portfolio extends beyond Chapter 3 to include market access and TRQs under Chapters 2 and 3, sanitary and phytosanitary measures under Chapter 9, agricultural biotechnology under Chapter 3 Section B, technical regulations and labeling under Chapter 11, geographical indications under Chapter 20, and customs administration and origin verification for agricultural goods.
U.S. agricultural exports to Mexico reached approximately $30.6 billion in 2025, while imports from Mexico reached approximately $43.9 billion. Globally, U.S. agricultural imports exceeded exports by approximately $41 billion in 2025. A bilateral agricultural deficit does not itself establish a treaty violation; commodity composition, seasonality, and supply-chain specialization all factor into the picture.
For compliance teams, the immediate legal requirements remain unchanged unless and until the parties adopt a legally effective amendment, decision, regulation, or other implementing measure. Potential changes could nevertheless affect TRQ administration, SPS certification, biotechnology approval timelines, labeling requirements, and border clearance for perishable and agricultural goods.
The legal texts that govern agricultural trade today, unaffected by ongoing negotiations.
- Committee on Agricultural Trade records (not separately published)
- Committee on Sanitary and Phytosanitary Measures records (not separately published)
- Free Trade Commission decisions ↗
- Chapter 31 dispute records (dairy & GE corn) ↗
- USDA Economic Research Service: USMCA agriculture ↗
- USDA Foreign Agricultural Service ↗
- APHIS & FSIS regulations and notices
- USTR agriculture issue area ↗
- USITC agricultural-trade reports ↗
- Secretaría de Economía ↗
- Secretaría de Agricultura y Desarrollo Rural (SADER)
- SENASICA & COFEPRIS notices
- Diario Oficial de la Federación: GE corn decree & panel ↗
- CUSMA Chapter 3 implementing text ↗
- Agriculture and Agri-Food Canada notices
- Canadian Food Inspection Agency (CFIA)
- Global Affairs Canada: dairy TRQ materials ↗
The most consequential comparisons on this page. Nothing here is legally effective unless labeled “confirmed by controlling authority.”
Canada administers dairy TRQs under Appendix 3-A.2, with a November 2023 panel confirming Canada’s discretion to limit eligible applicants to processors, distributors, and further processors under Article 3.A.2.6(a).
U.S. dairy organizations are reportedly pressing for more prescriptive allocation language, minimum allocations for distributors and retailers, and stronger fill-rate and reallocation requirements. Not located in published negotiating text.
The July 20, 2026 dairy proclamation does not change Appendix 3-A.2 or disturb the November 2023 panel outcome. It moves the same dispute onto a different instrument. Rather than seeking a further Chapter 31 proceeding on quota eligibility, the United States has applied a unilateral duty under domestic tariff authority that operates independently of USMCA origin. For compliance teams this separates two questions that could previously be answered together: whether a good qualifies as originating, and whether it appears in a Section 338 annex.
A Chapter 31 panel ruled on December 20, 2024 that Mexico’s February 2023 decree restricting genetically engineered corn was inconsistent with multiple SPS obligations, including risk-assessment and necessity requirements.
A publicly agreed compliance measure or implementation agreement has not been located. Mexico has continued to emphasize native-corn protection and food sovereignty even after the adverse ruling.
Seasonal and perishable Mexican produce (e.g., tomatoes) is managed largely through existing U.S. antidumping and countervailing-duty law and suspension agreements, outside USMCA Chapter 3 itself.
Certain U.S. producers have sought changes making it easier to bring antidumping or countervailing-duty cases based on regional or seasonal injury. Mexican exporters generally oppose this. No specific legal text located.
Resolved litigation that remains highly relevant to how the review may unfold.
United States v. Mexico
Articles 2.11, 9.6.3, 9.6.6, 9.6.10, 9.6.14
Mexico’s February 13, 2023 decree restricted genetically engineered corn for tortillas and dough and directed gradual substitution in animal feed and other uses. The United States argued the measures restricted imports in violation of Article 2.11 and were not properly grounded in a risk assessment under Chapter 9.
On December 20, 2024, the panel found Mexico had not conducted a qualifying risk assessment, that the measures were not adequately based on scientific principles, that they exceeded what was necessary, and that they were more trade restrictive than required, including a finding that the measures were applied beyond the extent necessary under Article 9.6.6(a). Confirmed
Mexico publicly emphasized the cultural, biodiversity, and food-sovereignty importance of native corn even after the adverse decision. ICPA has not located a published compliance measure or U.S. assessment of full compliance as of July 26, 2026.
The case is a leading precedent on science-based SPS regulation, the evidentiary burden for precautionary restrictions, and the relationship between cultural or biodiversity objectives and SPS disciplines. Any Mexican proposal for procedural protections around native corn would need to be squared with this ruling.
United States v. Canada
Appendix 3-A.2, Articles 3.A.2.4, 3.A.2.6, 3.A.2.11
The United States challenged whether Canada’s dairy TRQ allocation methods allowed commercially meaningful access or instead channeled quota primarily through Canadian processors whose interests could discourage imports. A first panel addressed processor-reserved pools; after Canada revised its policies, the U.S. brought a second challenge to the replacement system.
The first panel found Canada’s exclusive reservation of dairy TRQ portions for processors inconsistent with Article 3.A.2.11(b). In the second dispute, decided November 10, 2023, the panel largely rejected the U.S. claims, finding Article 3.A.2.6(a) did not prohibit Canada from limiting applicants to processors, distributors, and further processors, and rejecting the claim that Canada’s market-share system violated Article 3.A.2.11(b). Confirmed
Canada’s current dairy TRQ administration reflects the outcome of the second panel. No further Chapter 31 proceeding on this issue has been located as of July 26, 2026.
The contrast between the U.S. win in the first panel and its loss in the second illustrates how much regulatory discretion existing treaty language leaves Canada. This is likely to shape U.S. negotiating strategy toward clearer, more prescriptive allocation and fill-rate language rather than a new dispute under current text.
Recurring and developing issue-areas ICPA is tracking beyond the two headline disputes. Status reflects the most recent verification pass; none of these has been adopted as a legally effective change.
Quick-reference summary of the same issues above.
- Canadian supply management (dairy, poultry, eggs)
- Agricultural-biotechnology approval delays
- Animal-health restrictions & New World screwworm
- Plant-health & horticultural restrictions
- Tomato suspension-agreement disputes
- Sugar & sweetener trade arrangements
- Section 338 tariff exposure from Canada dairy administration
- Meat & livestock country-of-origin labeling
- Pesticides, MRLs & glyphosate divergence
- Organic-standards equivalence
- Geographical indications & common food names
- Front-of-package & nutrition labeling
- Fertilizer, feed & seed input security
- Produce traceability & food-safety screening, Mexico-origin lettuce
FDA’s outbreak investigation of Cyclospora illnesses linked to Taylor Farms de Mexico iceberg lettuce now covers 6,358 laboratory-confirmed cases across 15 states as of August 5, up from the nine-state footprint in FDA’s late-July updates, and now includes illnesses tied to Taco Bell exposure as well as the recalled lettuce. FDA states there are no confirmed positive product sample results: the one positive sample collected at the border was withdrawn as a false positive. FDA says the false positive does not change the epidemiological basis for the investigation, and Taylor Farms’ voluntary recall and suspension of central-Mexico iceberg sourcing remain in place.
This has moved from a monitored topic to an active operational issue with fixed dates on both sides of the border.
- Aug. 24, 2026 – Douglas, AZ port opens to cattle trade, contingent on joint action plan compliance; full USDA inspection on every animal
- Sequencing to follow – Santa Teresa and Columbus, NM at operational-preparation stage; no announced dates
- Ongoing – Mexico continues to suspend imports of several U.S. live-animal categories following screwworm detections in the United States; confirm current requirements with APHIS before booking southbound shipments
Neither the reopening nor the southbound restrictions required a treaty amendment. Both were accomplished through agency action, which is the practical reason Chapter 9 coordination is a live subject in the review rather than a background one.
- Confirm current TRQ utilization & fill rates
- Review SPS certificate & risk-assessment documentation
- Track animal- and plant-health emergency restrictions
- Monitor biotechnology & gene-edited approval timelines
- Watch tomato & sugar suspension-agreement status
- Review labeling programs against pending proposals
- Confirm origin documentation for processed foods
- Identify perishable shipments exposed to border delays
- Confirm Section 338 annex coverage for Canadian-origin goods
Formal positions inferred only from official statements, not from press reporting or meeting attendance alone.
Seeks commercially meaningful Canadian dairy access, full compliance with the GE corn ruling, science-based SPS regulation, and reduced agricultural trade barriers. Emphasizes trade deficits, supply-chain resilience, and reciprocal market access. Declined to renew USMCA in its current form on July 1, 2026.
Protects native corn, biodiversity, and food sovereignty as domestic policy priorities while formally addressing the GE corn ruling. Defends produce and food-export access and opposes seasonal trade-remedy reforms.
Defends supply management and TRQ administration discretion, consistent with the November 2023 panel outcome. Generally supports predictable, science-based biotechnology approval systems and continental trade stability.
With the Section 338 50 percent duties on listed Canadian dairy, alcohol, and motor vehicle goods set to take effect August 19 regardless of USMCA origin, Canadian Press reporting describes intensified negotiations in Washington: Trade Minister Dominic LeBlanc met with industry groups and senators, while chief trade negotiator Janice Charette remained in Washington over the weekend for detailed discussions. Prime Minister Carney said his government remains loyal to the supply management system, while separate Canadian Press reporting says some work is being done around the dairy TRQ quotas negotiated in 2018. Ottawa has not announced retaliation targets and has said it will not retaliate before the tariffs take effect. BNN Bloomberg / Canadian Press, Aug 7 ↗
Publicly supported the July 20 Section 338 dairy action, arguing that Canada’s administration of its USMCA dairy tariff-rate quotas has produced persistent underfill and denied the market access the agreement contemplated. Both organizations have also pressed USTR to address Canadian dairy protein export practices and protection of common food names through the review. Statement dated July 20, 2026.
Welcomed the conclusion of the Mexico City round and urged the parties to move from bilateral management toward a trilateral resolution. NCGA has consistently identified Mexico as the largest purchaser of U.S. corn and Canada as the largest ethanol market, and has emphasized the value of USMCA dispute settlement for biotechnology access. Statement dated July 24, 2026.
Dairy Farmers of Canada publicly urged the federal government not to offer additional concessions on dairy or supply management in the talks with Washington ahead of the August 19 tariff effective date, stating that “our food sovereignty is not for sale; a bad deal is not worth the cost” and arguing that prior Canadian compromises were met with fresh U.S. demands. The statement sharpens the industry-position contrast with U.S. dairy groups such as NMPF, which has backed USTR’s use of Section 338 against Canada’s TRQ administration. Statement reported August 7, 2026. BNN Bloomberg, Aug 7 ↗
USDA Economic Research Service figures for 2025. Reported trade data, not modeled projections.
| Measure | 2025 figure |
|---|---|
| Total U.S.–Mexico two-way agricultural trade | ~$74.5 billion |
| Total U.S.–Canada two-way agricultural trade | ~$67.5 billion |
| U.S. agricultural exports to Mexico | ~$30.6 billion |
| U.S. agricultural imports from Mexico | ~$43.9 billion |
| Global U.S. agricultural trade balance | −$41 billion (imports exceed exports) |
Source: USDA Economic Research Service. A bilateral or global agricultural trade deficit does not itself establish a treaty violation or unfair practice. Commodity composition, seasonality, climate, exchange rates, and supply-chain specialization all factor into these figures.
Extended to entry into force. Distinguishes negotiation, implementation, dispute, and economic-report events.
Reviewed and updated with each page verification pass.
- A comprehensive public agriculture agenda from the July 1, 2026 joint-review meeting has not been located
- A definitive public statement identifying Mexico’s post-ruling compliance measures, and a U.S. assessment of full compliance, has not been located
- A publicly agreed resolution memorializing the outcome of the second U.S.–Canada dairy dispute has not been located beyond the panel report itself
- Exact figures behind reported Canadian TRQ allocation demands are not confirmed by government source
- Specific legal text for seasonal-produce trade-remedy proposals has not been located
- A consolidated record of SPS committee concerns raised since July 2020 has not been located
- Complete bilateral negotiating texts or draft amendments under consideration in July 2026 have not been located
- A dated APHIS notice confirming the current full list of Mexican restrictions on U.S. live-animal exports, and any new documentary requirements, has not been located
- No public Canadian agriculture-specific joint-review statement has been located after July 3, 2026, leaving the trilateral picture procedurally uneven
- Whether agriculture would be included in any interim U.S. arrangement with Mexico or Canada in 2026 has not been addressed in a public government document
ICPA’s trade law partners can help members navigate TRQ compliance, SPS documentation, and biotechnology import requirements as this topic develops.
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This tracker is researched, written, and maintained by Heather Tschirhart, Head of Research, Data, and Analytics.