Resolving the NZ-Canada Dairy Dispute: An End to Protectionism

For years, a heated dispute simmered between New Zealand and Canada over dairy market access, with Canada contravening the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) rules. Despite a legal victory for New Zealand, Canada persisted in its non-compliance, driven by political support for its domestic dairy industry. This has included subsidizing their farmers and dumping cheap products on international markets.

The resolution came after extensive negotiations and frustrations from New Zealand's Trade Minister Todd McClay and Dairy Companies Association Executive Director Kimberly Crewther, who criticized Canada's actions as cynical and disdainful of international trade obligations. However, the breakthrough now promises up to $157 million in annual export value for New Zealand, with Canada agreeing to reform how it administers dairy quotas.

This will involve swifter access for New Zealand exporters, an efficient reallocation of underused quotas, and penalties for misuse. The agreement reflects a larger commitment to a rules-based trading system, delivering on the validation of the CPTPP as a leading global trade agreement.

The changes will be effective from 2026, with enhanced administrative processes making the quotas more valuable and accessible. Crewther emphasized ongoing vigilance to ensure the successful implementation of these reforms, noting concerns about Canadian subsidized exports impacting global dairy markets. She highlighted the need for Canada to be accountable under World Trade Organization rules.