Canada dairy trade dispute rolls on as changes fail to comply with rules, minister says

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Trade Minister Todd McClay says
Photo: RNZ / Samuel Rillstone

Trade Minister Todd McClay is accusing Canada of continuing to fail to comply with its trade agreement regarding dairy products.

In September last year, New Zealand won a trade dispute which found Canada was breaching the agreement by blocking dairy exporters’ access to the Canadian market.

New Zealand initiated the proceedings because Canada was not complying with Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) rules.

A CPTPP arbitration panel ruled in New Zealand’s favour.

Canada had until Wednesday to change how it administered tariff rate quotas – to stop giving its own domestic industry priority access, and to allow exporters to benefit fully from the market access negotiated in good faith between Canada and New Zealand.

However, McClay said the changes which Canada had published on Thursday still did not comply with the ruling.

He said Canada’s refusal to comply in full with a CPTPP trade dispute ruling over dairy trade was cynical and New Zealand had no intention of backing down.

“Canada’s ongoing failure to meet its legal commitments is disappointing, but we have no intention of giving in on this. We back our exporters and we will defend hard-won free trade agreement commitments.”

“New Zealand supports trade rules and takes seriously its obligations to trade partners. We expect others to show us the same courtesy.”

He had asked for urgent legal advice on how to proceed.

He said the Canadian government still had time to honour its obligations to New Zealand both in the spirit and substance of the agreement.

ACT Party trade spokesperson Dr Parmjeet Parmar called it a “betrayal of our friendship”.

“It’s hard to think of two countries with warmer relations than New Zealand and Canada. Our shared history and cultural similarities ought to be the basis of a close, good-faith relationship. But on trade, Canada is shutting us out… Canada signed the CPTPP knowing their exporters would benefit from reduced barriers to trade. But free trade is meant to go both ways.”

She said if Canada could not comply, it should be “booted out of the deal”.