Import licensing is one of the tools USDA uses to administer the tariff-rate quota (TRQ) system for U.S. imports of dairy products. TRQ’s replaced Section 22 import quotas for dairy products on Jan. 1, 1995, as a result of the Uruguay Round Agreement.

Under these TRQ’s, 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.