New Zealand Escalates CPTPP Dispute Over Canadian Dairy TRQs

New Zealand last week launched mandatory negotiations with Canada under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership to challenge Canada’s dairy tariff rate quotas, saying they are unfairly restricting New Zealand exporters. The country said a panel of arbitrators ruled in favor of New Zealand in September 2023, finding Canada breached its CPTPP obligations “by blocking New Zealand dairy access.” Since then, Canada “failed to comply with the ruling,” New Zealand said.

“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,” New Zealand Trade and Agriculture Minister Todd McClay said. “Canada is not doing that in respect to the dairy quotas that were negotiated and agreed with New Zealand.”

Mary Ng, Canada’s trade minister, said Canada has put in place “new policies” to address the panel’s findings, adding that the country is “very disappointed that New Zealand has decided to continue to challenge Canada’s dairy TRQ system.”

“We have been through this before and have consistently and successfully defended our dairy sector and supply management from trade challenges under” both CPTPP and USMCA, Ng said. “We are confident that Canada’s new policies fulfill Canada’s obligation to eliminate the non-conformity identified by the panel.”

Under the CPTPP dispute settlement process, negotiations must begin within 15 days from the Oct. 18 notification.