Canada Reaffirms Commitment to Defend Dairy Sector Amid Trade Dispute with New Zealand
Source: DairyNews.today
Canada has pledged to staunchly defend its dairy sector as New Zealand escalates a protracted trade dispute concerning market access under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). On Friday, New Zealand formally triggered mandatory negotiations, demanding resolution of long-standing disagreements over Canada’s dairy tariff-rate quota (TRQ) system.
Federal Trade Minister Mary Ng and Agriculture Minister Lawrence MacAulay released a joint statement on Saturday, emphasizing Canada's position. “Canada is very disappointed that New Zealand has decided to continue to challenge Canada’s dairy TRQ system,” the ministers stated. “We have been through this process before and have consistently defended our dairy sector and supply management in previous challenges under both CUSMA and the CPTPP.”
The dispute stems from New Zealand’s claim that Canada’s allocation of dairy TRQs, a mechanism designed to regulate the volume of tariff-free imports, unfairly favors domestic processors over foreign exporters, violating CPTPP rules. New Zealand Trade Minister Todd McClay announced that his government had formally notified Canada and other CPTPP members, triggering negotiations that must commence within 15 days.
New Zealand initially launched the dispute in May 2022, alleging that Canada had breached its commitments by restricting foreign access to its dairy markets. The New Zealand government expects fair treatment of its exporters within the agreed-upon frameworks. “Canada is not acting in accordance with the dairy quotas that were negotiated with New Zealand,” McClay asserted.
In response, Ng and MacAulay reiterated Canada's firm commitment to protecting its supply management system while expressing a willingness to engage with New Zealand “in good faith.” The ministers also affirmed their confidence that Canada’s revised policies have addressed concerns raised by a previous arbitration panel.
The dispute has garnered international attention, with five other CPTPP signatories—Australia, Japan, Mexico, Peru, and Singapore—joining New Zealand in challenging Canada’s dairy TRQ practices. Despite both countries claiming partial victories from an arbitration ruling in September 2023, New Zealand maintains that Canada has not fully complied with the panel's findings in a timely manner.
This marks the first trade dispute initiated by New Zealand under any free trade agreement, and notably, the first case brought under the CPTPP framework. The outcome of the upcoming negotiations could have significant implications for both Canada’s dairy industry and international trade relations within the CPTPP.
The dispute stems from New Zealand’s claim that Canada’s allocation of dairy TRQs, a mechanism designed to regulate the volume of tariff-free imports, unfairly favors domestic processors over foreign exporters, violating CPTPP rules. New Zealand Trade Minister Todd McClay announced that his government had formally notified Canada and other CPTPP members, triggering negotiations that must commence within 15 days.
New Zealand initially launched the dispute in May 2022, alleging that Canada had breached its commitments by restricting foreign access to its dairy markets. The New Zealand government expects fair treatment of its exporters within the agreed-upon frameworks. “Canada is not acting in accordance with the dairy quotas that were negotiated with New Zealand,” McClay asserted.
In response, Ng and MacAulay reiterated Canada's firm commitment to protecting its supply management system while expressing a willingness to engage with New Zealand “in good faith.” The ministers also affirmed their confidence that Canada’s revised policies have addressed concerns raised by a previous arbitration panel.
The dispute has garnered international attention, with five other CPTPP signatories—Australia, Japan, Mexico, Peru, and Singapore—joining New Zealand in challenging Canada’s dairy TRQ practices. Despite both countries claiming partial victories from an arbitration ruling in September 2023, New Zealand maintains that Canada has not fully complied with the panel's findings in a timely manner.
This marks the first trade dispute initiated by New Zealand under any free trade agreement, and notably, the first case brought under the CPTPP framework. The outcome of the upcoming negotiations could have significant implications for both Canada’s dairy industry and international trade relations within the CPTPP.
