New Zealand has won a trade fight with Canada over the refusal of Kiwi dairy goods to enter the North American nation.
Both countries are signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade agreement between a group of countries that also includes Australia and Mexico and to which the United Kingdom has committed.
New Zealand initiated the matter, basically charging Canada of protectionism, in May of last year. A CPTPP tribunal heard the case and upheld New Zealand’s complaint.
It found that Canada’s dairy quota administration is incompatible with its CPTPP obligations, and that as a result, New Zealand exporters were unable to fully utilize Canada’s 16 dairy tariff rate quotas because Canada was granting priority access to its own domestic dairy processors.
New Zealand asserted Canada devised a sophisticated mechanism that diverted allocations away from Canadian importers who were likely to utilize the quota to purchase New Zealand products. Instead, domestic dairy processors purchased the quota.
Damien O’Connor, New Zealand’s Minister for Trade and Export Growth, applauded the decision.
“Canada was not living up to its CPTPP commitments by effectively blocking access for our dairy industry to expand its exports,” he added. That will have to alter immediately.
“This is a major victory for New Zealand and our exporters.” In the last three years, our dairy sector has lost an estimated NZ$120 million ($70.7 million) in income from the Canadian market.
He went on to say, “Today’s ruling will give exporters confidence and certainty that the mechanisms in place will ensure they receive the market access that all members agreed to.”
In reaction, David Wiens, president of The Dairy Farmers of Canada, said, “Dairy Farmers of Canada is disappointed with the dispute panel’s ruling.”
In response, he has urged the Canadian government to conduct a “thorough review” of New Zealand’s dairy-support policies to “ensure that they are consistent with its international trade obligations.”
This is New Zealand’s first disagreement with a CPTPP partner, and its position was backed by the majority of the other pact members.
The CPTPP went into effect in 2018. Jennifer Hillman, a former commissioner of the US International Trade Commission, Colleen Swords, a former Canadian diplomat, and Petros Mavroidis, an international trade expert, co-chaired the dispute panel in this case.
