New Zealand Stands Firm Against Canada's Dairy Trade Dispute Backlash

Mr McClay said he has asked for urgent legal advice in respect of our ‘next move’ and says the Canadian government still has time to honour its obligations to New Zealand both in the spirit and substance of the agreement.

New Zealand initiated the dispute because Canada was not complying with Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) rules, blocking dairy exporters’ access to its market.

A CPTPP arbitration panel ruled decisively in New Zealand’s favour. Canada had until 1 May to change how it administered its tariff rate quotas - to stop giving its own domestic industry priority access, and to allow exporters to benefit fully from the market access negotiated in good faith between Canada and New Zealand.

“The changes Canada has published today do not comply with the ruling. Canada’s ongoing failure to meet its legal commitments is disappointing, but we have no intention of giving in on this. We back our exporters and we will defend hard-won free trade agreement commitments,” Mr McClay says.

“New Zealand's prosperity depends on international trade, making up 60 per cent of the country’s total economic activity. It is only through a strong economy that we can reduce the cost of living and afford the public services Kiwis deserve.

“We continue to engage in good faith throughout this process and I’ve asked officials to provide advice on next steps. I will be making an announcement on that in due course.

“New Zealand supports trade rules and takes seriously its obligations to trade partners. We expect others to show us the same courtesy.”

Trade Minister Todd McClay has condemned Canada's refusal to comply fully with a CPTPP trade dispute ruling in New Zealand's favor regarding dairy trade. Describing Canada's stance as cynical, McClay asserts that New Zealand remains resolute and will not back down.

McClay has sought urgent legal advice to determine the appropriate course of action, emphasizing that Canada still has the opportunity to fulfill its obligations under the CPTPP agreement. New Zealand initiated the dispute due to Canada's non-compliance with CPTPP rules, which hindered dairy exporters' access to the Canadian market.

Following a decisive ruling by a CPTPP arbitration panel in New Zealand's favor, Canada was given until May 1 to revise its administration of tariff rate quotas to provide exporters with fair access to the market. However, the changes implemented by Canada do not align with the panel's ruling, disappointing New Zealand.

McClay underscores New Zealand's commitment to defending the interests of its exporters and upholding the integrity of free trade agreements. Given that international trade plays a significant role in New Zealand's economy, McClay stresses the importance of adhering to trade rules to promote economic prosperity.

While expressing disappointment in Canada's failure to meet its legal commitments, McClay asserts that New Zealand will continue to engage in good faith and explore next steps in addressing the dispute. He emphasizes that New Zealand expects reciprocity and adherence to trade obligations from its partners, reflecting the country's commitment to fair and transparent trade practices.