Minister raises tariffs dispute

The Comprehensive Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a gold-standard free trade agreement of which both NZ and Canada are members. Canada is obliged to comply with the rule of the agreement, which means allowing NZ access for its dairy exports.

But in what is seen as a hypocritical and illegal stance, and despite winning arbitration actions, NZ has been unable to budge the Canadian government to comply with CPTPP rules.

McClay has in the past described Canada's action as cynical, while the head of DCANZ, Kimberly Crewther says Canada is a recidivist breaker of international trade rules and has cost the NZ dairy industry in the order of $120 million. The Canadian dairy industry is very small - there are just 1.3 million cows, but the dairy farmer lobby there is strong.

Before he left for Vancouver for the meeting, McClay told Dairy News that he'll be meeting his counterpart Mary Ng and will be raising this dispute with her directly. He says officials have met and have scheduled ongoing formal dispute process meetings, and continue to encourage Canada to meet their obligation to New Zealand.

"I have been clear, we have a good relationship with Canada, and we can work through issues, but in this case, they are not upholding their obligations to us and as a result, NZ dairy farmers are missing out on market access that was negotiated and granted under the CPTPP. This is a matter of principle and we take our obligations seriously and expect others to do the same," he says.

McClay says the ball is now squarely in Canada's court and NZ reserves the right to take any action deemed appropriate, including imposing tariffs sanctions on Canadian exports to New Zealand if this cannot be resolved at the diplomatic level.

As host of a free trade summit, this is not a good look for the Canadians who are clearly out of step with the other eleven member states.