New Zealand launches trade dispute with Canada

New Zealand has filed a trade dispute against the implementation of Canada’s tariff quotas on dairy products. This sets the amount of dairy products that can cross the border without tariffs.

The procedure is being submitted under the Comprehensive and Progressive Agreement (CPTPP) on this kind of first Trans-Pacific Partnership.

Trade Minister Damien O’Connor said on May 12 that New Zealand believes Canada’s quota is inconsistent with the promises outlined in the CPTPP.

“Our priority is to give New Zealand exporters meaningful access to the interests negotiated under the CPTPP, and to fulfill the promises that all parties have made to each other under agreement.” And O’Connor Said..

New Zealand exporters are estimated to lose an estimated $ 68 million ($ 43 million) under Canadian quotas in the first two years before the year-on-year increase.

“New Zealand has a great relationship with Canada, one of the closest partners in the world,” O’Connor said. “Occasionally, even good friends disagree. Therefore, dispute resolution mechanisms in free trade agreements such as the CPTPP provide a neutral forum for resolving such disputes when they occur. Exists in. “

Canada has seven days to respond to the request, after which the two countries will enter into formal talks. If it remains unresolved, New Zealand may request a panel to award the dispute.

Canadian dairy cow
Dairy cows can be seen on August 30, 2018 at a farm in Saint Valerian De Milton, southeast of Montreal, Quebec, Canada. (Christinne Muschi / Reuters)

The New Zealand Dairy Association (DCANZ), whose members make up about 98% of New Zealand’s processed milk, welcomed this announcement.

“Canada has taken an approach to managing CPTPP quotas, which violates the rules of the agreement and severely restricts the use of limited market access,” said Malcolm Bailey, Chairman of DCANZ. Said..

He said Canada’s dairy industry is highly protected and tariffs have reached as high as 300%, but the Canadian administration meets dairy quotas with domestic processors.

“Canadian processors are not interested in offering Canadian consumers and customers the option to access New Zealand’s high-quality, professional and affordable dairy products as competitors, so they are unused. It’s based on quotas, “says Bailey.

Dispute resolution will take place after the United States wins its own trade dispute with Canada over dairy tariff quotas in January.

The United States argued that Canada’s interpretation of the trade rules under the United States-Mexico-Canada Agreement denied fair access to the Canadian market.

The Panel found that Canadian practice was “inconsistent” with trade obligations under a trilateral agreement.

Rebecca Chu


Rebecca Zhu is based in Sydney. She focuses on Australian and New Zealand national affairs. Do you have a hint? Contact her at [email protected]