New Zealand has taken its cue from the US and launched its own challenge of Canada’s allocation of dairy quotas.
On May 12, New Zealand initiated dispute settlement proceedings against Canada regarding its implementation of tariff rate quotas under the terms of the CP-TPP trade deal.
New Zealand has informed Canada and other signatories to the agreement that Canada has violated its obligations to its Pacific trading partners.
“Many of Canada’s dairy TRQs remain unfulfilled and this represents a tangible loss to New Zealand’s dairy producers,” New Zealand states.
A presentation to Lower Mainland milk producers last fall indicated that CP-TPP trading partners had exercised 20% of the TRQs for cheese while virtually none of those allocated for fluid milk had been filled.
New Zealand estimates damages at $68 million in the first two years.
The complaint follows the success of a similar US complaint regarding tariff rate quotas (TRQs). TRQs cover 14 types of products.
A decision published earlier this year found that Canada’s reservation of TRQs specifically for dairy processors prevented the US dairy sector from accessing markets in Canada. The decision required Canada to eliminate preferential allocation to Canadian processors by February 3.
The US complaint was the first filed under NAFTA. Similarly, New Zealand’s complaint is the first filed regarding an alleged breach of the CP-TPP.