NZ invokes mandatory talks to settle dairy dispute
A dairy quota dispute between New Zealand and Canada is heading to mandatory negotiations.
She says Canada's actions have already cost the NZ dairy industry $120 million and are putting at risk over a billion dollars in dairy trade to NZ.
"Canada is a recidivist breaker of international trade rules," she told Dairy News.
The issue is about Canada's refusal to comply with the rules of the Comprehensive and Progressive for Trans-Pacific Partnership (CPTPP), blocking dairy exporters' access to its market. Access to Canada's market was a condition of CPTPP membership and it refused to comply; then NZ won a dispute hearing, but this has also fallen on deaf ears in Canada.
This prompted Trade Minister Todd McClay last week to blast Canada, saying its actions were cynical and that NZ was seeking further legal advice to see what action could be taken to force the Canadian government to honour and comply with the rule of CPTPP.
"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," he says.
Driving the Canadian government's position is the power of its dairy lobby, notes Crewther. She says she's had a meeting with them which was simply a "robust discussion" with no outcome.
By comparison to NZ, the Canadian dairy industry is small. There are just 1.3 million cows on nearly 10,000 farms and the average herd size is a mere 89 cows. But in Canada's case it appears the size is not in the number of cows - rather the number of vocal and politically active farmers. They have clearly got their government in the palm of their hand and it's election year there as well, so no surprises.
Crewther says the actions of Canada's protectionist policies in dairy have much wider implications for international dairy trade. She says Canada's dairy exports are subsidised, which severely disadvantages NZ.
"What they are doing is not only causing harm to us as a trading partner, but they are also short-changing their own consumers with higher than necessary dairy prices Canada," she says.
Crewther says by flouting international trade rules and the dispute process under CPTPP, there is growing concern that Canada's actions are diminishing the overall value of this important trade agreement.
This view was echoed last year when Ministry of Foreign Affairs and Trade (MFAT) deputy secretary trade and economic, Vangelis Vitalis, said frankly that Canada's approach to administering its dairy quotas is protectionist and undermines the market access agreed between CPTPP parties.
