New Zealand has won a significant trade dispute against Canada over its restrictions on dairy imports that lost Kiwi farmers $120 million over three years.
A special arbitration panel found Canada breached trade rules by using administrative complexity to prevent importers from accessing the market.
The dispute centred on how Canada used dairy tariff rate quotas under the Comprehensive Trans Pacific Partnership (CPTPP) – a free trade deal signed in 2018 among 11 nations in the Asia Pacific region.
Canada’s dairy farmers have long enjoyed special market protections and when the CPTPP was negotiated it refused to open its dairy market fully. Instead, parties like New Zealand had to settle for limited access in the form of dairy tariff rate quotas.
New Zealand initiated the dispute in May last year, arguing Canada prioritised the quotas for domestic dairy processors over other importers.
It's the first time the country has taken a case against a free trade partner.
The panel said Canada must stop favouring its domestic industry and now has 15 months to comply with the ruling.
It was the first time New Zealand has taken a dispute with a free trade agreement, and the first dispute brought under the CPTPP.
Dairy is New Zealand’s biggest export earner, projected to earn more than $25 billion this year, according to a report by Sense Partners and commissioned by Dairy NZ.
Canada is also claiming the decision as a win saying the ability to continue to set its own allocations of quotas is a "clear victory".
A Global Affairs spokesperson said the country will continue to protect and defend its supply chain domestically.
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