Tuesday, 21 January 2025 07:55

Processors take Canada to task

Written by  Peter Burke
DCANZ chief executive Kimberly Crewther says this is an ongoing battle to ensure Canada upholds its trade commitments on dairy. DCANZ chief executive Kimberly Crewther says this is an ongoing battle to ensure Canada upholds its trade commitments on dairy.

The Canadian government's utter disdain for international trade rules has come under fire yet again.

This time the NZ Dairy Companies Association (DCANZ) has joined forces with similar organisations in the United States and Australia in writing to their respective agriculture ministers over Canada's dumping of subsidised dairy products on the world market. The move is distorting the market and affecting dairy farmers' returns in other dairy exporting countries such as NZ.

The dispute comes about because of the way the Canadian milk pricing system is structured and subsidised. In essence, Canadian milk processing companies are able to access milk at below the cost of production from farmers, allowing them to sell their products at a much lower price than processing companies in NZ, the US and Australia.

DCANZ executive director Kimberly Crewther says the letter highlights that action to curb these harmful Canadian policies is a matter of urgency, with the imminent prospect of further Canadian processing investment premised on this access to below-cost milk protein. She says the joint-call is for the governments of New Zealand, US and Australia to actively pursue the issue using all available tools.

"Canada's policy approach is at odds with its international trade obligations in much the same way as previous Canadian dairy pricing policies were found to breach WTO export subsidy rules in the past. This is an ongoing battle to ensure Canada upholds its trade commitments on dairy," she says.

This latest spat with Canada is in addition to a separate ongoing dispute that has seen Canada refuse to open up its market to NZ dairy products as part of an agreement and rules of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Under CPTPP rules, Canada is required to give NZ access to its market, and despite NZ winning a  mediation dispute to have access, Canada blatantly refused to budge. This dispute has been going on for almost two years.

This has led Crewther to label Canada "a recidivist breaker of international trade rules". Previously high-ranking MFAT trade negotiator, Vangelis Vitalis, said "putting it frankly, Canada's approach to administering its dairy quotas is protectionist and undermines the market access agreed between CPTPP parties".

And to top it off, Canada has also had a blast from Trade Minister Todd McClay who described their actions as "cynical".

Behind this dispute is a somewhat fragile political imperative for the Canadian government who, like many other countries, are hell bent on bowing to a small but vocal domestic dairy industry and thumbing their noses at binding trade agreements. It will be interesting to see if, and how, the new Trump administration will deal with the Canadians.

More like this

Will Trump get involved in NZ's dairy dispute?

Canada's blatant manipulation of international trade rules around the export of subsidised dairy products is likely to escalate further with the new Trump administration now in the White House.

Editorial: O Canada

OPINION: The Canadian government's love affair with its lifestyle dairy farmers has got it into trouble once again.

Minister raises tariffs dispute

Trade Minister Todd McClay has used a meeting of the CPTPP hosted by Canada to take that country to task for defiantly refusing to open up its dairy market to NZ.

Featured

Fruit fly discovery 'concerning'

Horticulture New Zealand (HortNZ) says that discovery of a male Oriental fruit fly on Auckland’s North Shore is a cause for concern for growers.

Fonterra updates earnings

Fonterra says its earnings for the 2025 financial year are anticipated to be in the upper half of its previously forecast earnings range of 40-60 cents per share.

Nedap NZ launch

Livestock management tech company Nedap has launched Nedap New Zealand.

National

Certainty welcomed

There's been very little reaction to the government science reform announcement, with many saying the devil will be in the…

Science 'deserves more funding'

A committee which carried out the review into New Zealand's science system says the underinvestment will continue to compromise the…

Machinery & Products

Landpower win global award

Christchurch-headquartered Landpower and its Claas Harvest Centre dealerships has taken out the Global After Sales Excellence award in Germany, during…

Innovation, new products galore

It has been a year of new products and innovation at Numedic, the Rotorua-based manufacturer and exporter of farm dairy…

» Latest Print Issues Online

Milking It

No buyers

OPINION: Australian dairy is bracing for the retirement of an iconic dairy brand.

RIP Kitkat V

OPINION: Another sign that the plant-based dairy fallacy is unravelling and that nothing beats dairy-based products.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter