Dairy Row with Thais Reaches Boiling Point

NZ to insist on terms of FTA as Thailand drags its heels on commitment made 20 years ago. A dispute brewing between New Zealand and Thailand has blown wide open as the Thais back out of their dairy sector obligations under a free trade agreement signed 20 years ago.

On January 1, Thailand's remaining tariffs on dairy were due to fall to zero, but since last year they have been signalling they want to back away fr om the original agreement terms. NZ trade officials have been working frantically behind the scenes over the past year to try to bring them back onto the same page.

But this week Dairy Companies Association of NZ (DCANZ) CEO Kimberly Crewther confirmed to Farmers Weekly that the Thais are instead doubling down on efforts to renege on the deal, going as far as to impose quota-like limitations on NZ dairy imports.

The first approval round in January approved only one-third of the requested 93,000 tonnes of imported product. "There was the promise of a further approval round in March, but this has been delayed, and there are now reports that officials are requesting importers to reduce their requested volumes to fit within a 75,000t lim it for all import channels," Crewther said.

She said there are similarities between this dispute and that boiling over with Canadian dairy industry. "NZ agreed originally in this FTA to a very long-term phaseout of dairy tariffs and it is deeply disappointing they have chosen this route," Crewther said.

The government expressed concern over reports of restrictions on NZ imports and urged Thai officials to uphold their obligations under the NZ-Thailand Closer Economic Partnership agreement. New Zealand's dairy trade with Thailand was valued at about $450 million in 2024, with the bulk of this as concentrated milk product.