Import licensing is one of the tools USDA uses to administer the tariff-rate quota
(TRQ) system for U.S. imports of dairy products. TRQs replaced Section 22 import
quotas for dairy products on Jan. 1, 1995, as a result of the Uruguay Round Agreement.
Under these TRQs, a low tariff rate, called the low-tier rate, applies to imports
up to a specified quantity. A higher tariff rate, called the high-tier rate, applies to
any imports in excess of that amount. High-tier tariff rates will be reduced by 15 percent
over the six years of the Uruguay Round Agreement (1995-2000), while quantities subject to
low-tier rates will be increased gradually over that same period. TRQ rates and quantities
vary by product.