TL;DR:
- New Zealand challenges Canada’s handling of dairy import quotas under the CPTPP, seeking full compliance with trade agreement rulings.
- Dispute resolution efforts have so far resulted in a ruling favouring New Zealand, but Canada’s new proposals are deemed insufficient by NZ officials and dairy industry representatives.
- New Zealand considers all options, including legal avenues and international pressure, to ensure fair trade practices are upheld.
Trade Minister Todd McClay has voiced New Zealand’s determination to address Canada’s ongoing non-compliance with dairy import rules stipulated by the Comprehensive and Progressive TransPacific Partnership (CPTPP) agreement.
Following a successful challenge using the CPTPP’s dispute resolution mechanisms, New Zealand highlighted issues with Canada’s allocation of low-tariff import quotas, which significantly limited New Zealand dairy imports, costing the industry an estimated $120 million in lost sales over three years.
Despite a panel of international judges ruling in New Zealand’s favour, Canada’s subsequent efforts to adjust its quota allocation method have fallen short of expectations. McClay plans to discuss these shortcomings with his Canadian counterpart at an upcoming World Trade Organisation meeting, emphasising the need for Canada to fully adhere to the CPTPP panel’s decision.
The Dairy Companies Association of New Zealand (DCANZ) and the New Zealand government both find Canada’s revised proposals inadequate. With limited legal options available to enforce compliance, New Zealand may seek to leverage collective pressure from other CPTPP member countries to encourage Canada to align with the agreement’s free trade principles.
This situation underscores the broader implications of non-compliance within multilateral trade agreements, affecting not only bilateral relations but the integrity of the agreement as a whole.
