‘Canada faces reputational damage’ as it fights NZ dairy
Trade Minister Todd McClay says Canada’s reputation will be damaged by its ongoing restrictions on New Zealand dairy imports, despite already losing a trade dispute over the issue.
New Zealand won a dispute against Canada’s restrictions on dairy imports in September, in a first for countries as part of the Pacific-spanning Comprehensive and Progressive Trans Pacific Partnership (CPTPP) trade deal. A CPTPP panel ruled that Canada was wrong to use a system of tariffs and quotas to effectively restrict dairy imports from CPTPP countries – closing off hundreds of millions of dollars in potential trade for New Zealand exporters.
Despite the finding, Canada also claimed “victory” as the panel said the country could apply some discretion in its use of import tariff quotas. A deadline for amending its systems as per the ruling passed on May 1 and, according to McClay, Canada has failed to make the necessary changes and the Government is urgently seeking legal advice.
“The CPTPP gave New Zealand dairy exporters access to that market, Canada continues to put conditions around that access so that we're not benefiting from it,” McClay told Stuff.
“They're wrong. The tribunal found that they're wrong, they haven't met the requirements of the tribunal.”
McClay said Canada had made changes in response to the tribunal ruling, but the effectwasthesame,or“alittlebitworse,I would argue”.
Under the prior settings, New Zealand officials believe Canada restricted New
Zealand dairy export potential of $120 million over a three-year period.
Cabinet would be considering a number of options, including whether a new complaint needed to be made. Despite this, McClay said the dispute did not “ruin” a good relationship with Canada.
"If anything there's reputational damage here for Canada, if you think about it, right.
“The CPTPP, it works well, trade's grown significantly between everybody, everyone sort of brought down barriers to give access to each other's markets, and then, you know, Canada's sitting there protecting.”
The Canadian foreign ministry has indicated it will continue to fight its corner.
Global Affairs Canada spokesperson Jean-Pierre J Godbout said that Canada was confident its recent changes to the tariff and quota system “fulfill our obligations under the panel decision”.
“We will continue to back and support Canada’s dairy industry, farmers, and workers to ensure fairness in the international system they operate in.”