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O’Connor says the decision is a significant win for New Zealand primary sector exporters.
The Panel found that Canada’s dairy quota administration is inconsistent with its obligations under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
In May 2022, New Zealand initiated dispute settlement proceedings against Canada, challenging the country’s administration of its CPTPP dairy tariff quotas.
In June 2022, the two countries held consultations but no resolution was found.
Subsequently, on 7 November 2022, New Zealand then submitted a request for the establishment of a panel to hear the case.
O’Connor says that by effectively blocking access for New Zealand’s dairy industry, Canada was not living up to its commitments under the CPTPP.
“That will now have to change,” he says.
“This is a significant win for New Zealand and our exporters,” he adds. “Our dairy industry lost out on an estimated $120 million in revenue from the Canadian market in the past three years.”
O’Connor says the ruling will give exporters confidence and certainty that the mechanisms in place will ensure they receive the market access all members of the CPTPP agreed to.
“As part of the CPTPP agreement, we secured new dairy quota access accounting for 3.3% of Canada’s market – tens of thousands of tonnes per year in key dairy products for New Zealand’s exporters.”
The Panel found that New Zealand exporters were unable to fully utilise Canada’s 16 dairy tariff rate quotas and that Canada was granting priority access to their own domestic dairy processors.
O’Connor says New Zealand continues to value its “strong” relationship with Canada, which he says is “one of our warmest and closest relationships in the world”.
“The dispute mechanisms in CPTPP provide us with a neutral forum to resolve discrete trade issues such as this one,” he says.
“We look forward to our dairy exporters being able to properly utilise the hard-won market access we negotiated through CPTPP and we hope Canadian customers will welcome more consumer choice.”
