New Zealand escalates dairy trade dispute with Canada

The New Zealand government said on Friday it had escalated its long-running trade dispute with Canada over access for its dairy products into the North American country.

New Zealand Trade Minister Todd McClay said his government had notified the Canadian government and other members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade agreement that it had triggered mandatory negotiations in the dairy dispute with Canada.

These now must begin within 15 days.

New Zealand launched a claim against Canada in May 2022, arguing that Ottawa’s implementation of dairy tariff rate quotas under the trade pact were against the agreement’s rules.

In particular, New Zealand claims that although Canada agreed to allow some dairy market access to foreign firms through a system of tariff-rate quotas, it was in fact improperly allocating some of them to domestic firms.

“As a matter of principle, the New Zealand Government expects our trade partners to treat our exporters fairly and within the rules of our agreements,” McClay said in a statement.

“Canada is not doing that in respect to the dairy quotas that were negotiated and agreed with New Zealand,” he said.

Five other CPTPP members including Australia, Japan, Mexico, Peru and Singapore have joined New Zealand in the dispute, and in September 2023 both New Zealand and Canada claimed a panel of arbitrators found in their favour.

Canada’s High Commission in Wellington did not immediately respond to a request for comment.

New Zealand said on Friday that Canada had not complied with the findings within a reasonable amount of time.

This is the first dispute New Zealand has taken under a free trade agreement, and the first dispute that has been taken by any party under CPTPP, the New Zealand government said.

(Reporting by Lucy Craymer; Editing by Jamie Freed)