New Zealand has escalated its long-running dairy trade dispute with Canada by informing its government counterparts it is triggering compulsory negotiations.

Trade and Agriculture Minister Todd McClay alerted the Canadian government and other members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) early this morning of the developments.

Under CPTPP dispute settlement process, mandatory negotiations must commence within 15 days of notification.

In September 2023, New Zealand won a trade dispute, which found Canada was breaching the agreement by blocking dairy exporters’ access to the Canadian market.

Canada had until May to change how it administered tariff rate quotas but, after it failed to rectify the situation, the call was made to take next steps.

“New Zealand takes its obligations under trade agreements seriously,” McClay said. “The CPTPP is one of the highest quality agreements signed by a group of like-minded economies.

“Parties to the agreement understood the commitments they were making when the agreement was signed, and it is important they honour them.”

McClay said Canada was not treating New Zealand exporters fairly in respect to the dairy quotas that were agreed and negotiated between both countries.

“Canada can end this dispute by meeting its CPTPP obligations to us. If they continue to choose not to, they owe us compensation.”

From the point that negotiations conclude, Canada then has 30 days to resolve the issue before New Zealand can decide to take further action.

The minister has let stakeholders know of the development, along with Labour’s trade spokesperson Damien O’Connor.

As a result of Canada’s blocking of dairy access, New Zealand exporters have had losses worth hundreds of millions of dollars, but that will not necessarily equate to what is owed in compensation.

McClay heads to the G20 ministerial meeting in Brazil next week, where New Zealand was invited to attend as a guest. While there, the minister intends to meet with his Canadian counterpart.

This issue has been raised many times through officials and ministers, both in person and online, but Canada has not budged to date.

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