The Dairy Companies Association of New Zealand (DCANZ) is welcoming as necessary the New Zealand Government’s decision to trigger mandatory negotiations as the next step in the dairy quota dispute with Canada under the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP).

"New Zealand needing to take yet another legal step to ensure Canadian dairy trade policy is in line with its trade obligations feels like Groundhog Day. But it is unavoidable as Canada continues to flout the commitments it made under the CPTPP agreement," says DCANZ Executive Director Kimberly Crewther.

"We hope that Canada will come to the table with a genuine intent to preserve the integrity of the CPTPP agreement by complying with the rules. Trade rules and agreements are only as good as their implementation and so far, Canada’s disregard of its CPTPP dairy commitments has only served to undermine and diminish value."

The policies implemented to date by Canada to allocate import licenses for the sixteen quotas that facilitate dairy access to Canada’s market under the CPTPP agreement have placed the lions-share of access into the hands of Canadian processors, most of whom use only a fraction of their quota allocation. This creates barriers and costs that limit other importers with a stronger interest in New Zealand products from getting quota licenses.

"Canada’s market remains 95% closed to New Zealand dairy exporters outside of the import quotas. This heightens the importance of ensuring that New Zealand dairy exporters get a fair shot at exporting under the very limited market access that Canada agreed to in the CPTPP agreement."

DCANZ supports the Government’s action to protect New Zealand’s economic interests when trade partners breach the rules. DCANZ is also concerned about trade disruption arising from subsidised Canadian dairy exports and has requested the government take WTO action on this.

"Canada’s milk pricing system is operating to illegally subsidise the disposal of Canada’s surplus milk protein in global markets, harming New Zealand’s high-value protein business," says Crewther.

"It is a double whammy of trade distortion for Canada to be disregarding CPTPP rules and restricting agreed access to its own market while at the same time dumping products onto the global market in contravention of WTO rules. We support the New Zealand government taking decisive action to address both issues."

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