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CPTPP panel agrees with New Zealand on two dairy items against Canada

CPTPP panel agrees with New Zealand on two dairy items against Canada

The panel found New Zealand’s other four claims to be unfounded

By Diego Flammini
Staff Writer

A trade review panel agreed with New Zealand that some of Canada’s dairy measures violate the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

New Zealand brought six issues to the panel, which it requested in November 2022.

The three-person panel sided with New Zealand on two items.

One is that Canada’s pooling system for allocating tariff rate quotas (TRQ) is inconsistent with Article 2.29(1) of the CPTPP.

This section of the agreement states “each party shall administer TRQs in a manner that allows importers the opportunity to utilise TRQ quantities fully.”

The other issue the panel agreed with New Zealand on is that Canada gave priority to domestic processors, which violates Article 2.30(1)(b) of the trade deal.

This part of the deal outlines that unless otherwise agreed to, a participating country “does not allocate any portion of the quota to a producer group, condition access to an allocation on the purchase of domestic production or limit access to an allocation to processors.”

New Zealand officials welcomed the dispute panel’s ruling.

“Canada was not living up to its commitments under CPTPP, by effectively blocking access for our dairy industry to upscale its exports. That will now have to change,” New Zealand Trade Minister Damien O’Connor said in a statement.

The panel also found four of New Zealand’s claims to be unfounded.

The two parties now have 45 days to “agree on a reasonable period of time to eliminate any non-conformity.”

Canadian government representatives say the panel’s decisions are a win for the domestic dairy industry.

The panel agreed that Canada has discretion about how it applies CPTPP.

“The panel has made a significant finding by recognizing Canada’s discretion to set TRQ allocation policies, including determining who is eligible to obtain an allocation,” Trade Minister Mary Ng and Agriculture and Agri-Food Minister Lawrence MacAulay said in a joint statement. “We will not negotiate these allocations with countries who seek to weaken Canada’s supply management system.”

The Canadian dairy industry now wants the federal government to look at New Zealand’s dairy sector.

“We now call on the federal government to do a thorough review of the measures the government of New Zealand has put in place to support its dairy sector to ensure that they are consistent with its international trade obligations,” Dairy Farmers of Canada President David Wiens said in a statement.

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