NZ takes on Canada over dairy access
New Zealand is taking on Canada over lost dairy market access estimated to be worth $68m over the first two years of a trade partnership.
Trade and Export Growth Minister Damien O’Connor said New Zealand had initiated dispute settlement proceedings against Canada regarding its implementation of dairy tariff rate quotas (TRQs) under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
‘‘Our priority is to ensure that New Zealand exporters have meaningful access to the benefits negotiated under CPTPP, and that all parties fulfil the commitments they have made to each other under the agreement,’’ O’Connor said.
New Zealand had notified Canada and other CPTPP parties that New Zealand believed Canada’s implementation of its dairy TRQs went against the rules of the CPTPP, he said.
‘‘New Zealand considers the manner in which Canada is implementing its dairy TRQs to be inconsistent with its obligations under CPTPP.’’
Established in 2018, the CPTPP is a free trade agreement involving New Zealand and 10 other countries in the Asia Pacific region. Many of Canada’s dairy TRQs remained unfilled, which represented a tangible loss to New Zealand’s dairy exporters, O’Connor said.
The value to New Zealand of lost market access in Canada was estimated to be about $68m over the first two years of the partnership, he said. The losses were expected to increase each year as the size of quotas increased under CPTPP.
New Zealand had an excellent relationship with Canada, he said.
‘‘We have appreciated Canada’s engagement on this issue at different levels over a number of years and these proceedings will not come as any surprise to them,’’ O’Connor said.
‘‘Occasionally even good friends disagree, and it’s for that reason dispute settlement mechanisms in free trade agreements such as CPTPP exist.’’
New Zealand submitted its request for consultations to Canada yesterday, he said. Canada had seven days to respond to New Zealand’s request, after which time the two parties would enter into formal consultations to try to resolve the dispute.
If the dispute remained unresolved after consultations, New Zealand could request a panel to adjudicate the dispute, he said.
While New Zealand had initiated disputes in the World Trade Organisation before, this was the first dispute New Zealand had taken under a free trade agreement, and the first dispute that had been taken by any party under the CPTPP, he said.