In a significant development, the Canadian government and New Zealand have reached a mutually satisfactory solution to resolve their dispute over dairy tariff rate quotas under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The agreement, negotiated in close consultation with Canadian dairy stakeholders, aims to address concerns related to Canada’s supply management system.
The resolution of this long-standing issue marks a major step forward in Canada-New Zealand relations, showcasing the effectiveness of the CPTPP dispute settlement mechanism. The accord brings an end to New Zealand’s initiative under the CPTPP to dispute certain provisions related to dairy tariff rate quotas administered by Canada.
According to a statement issued by the Honourable Maninder Sidhu, Minister of International Trade, and the Honourable Heath MacDonald, Minister of Agriculture and Agri-Food, the changes will primarily include earlier return dates, introducing a chronic return penalty, introducing an underfill mechanism for TRQs with lower fill, and increasing data transparency. These technical policy changes are limited to quotas administered under the terms of the CPTPP and will not negatively impact Canada’s dairy industry or supply management.
New Zealand has confirmed that it will not take further action under the CPTPP dispute settlement process. The agreement demonstrates how Canada and New Zealand can work together to resolve differences using the mechanisms established under the trade agreement.
The Canadian dairy sector plays a vital role in rural communities and the economy, with 9,256 farms and 549 dairy processing plants generating significant revenue. The industry supports over 70,000 jobs nationwide.
These policy changes will be published on October 1, 2025, for implementation beginning with the 2026 calendar year dairy TRQs.
The resolution of this dispute showcases Canada’s commitment to maintaining and defending its supply management system while promoting trade and investment under the CPTPP. The agreement serves as a positive example of collaboration between key CPTPP partners in resolving differences through peaceful means.
In conclusion, the Canadian government’s announcement highlights the success of the CPTPP dispute settlement mechanism in addressing long-standing issues between Canada and New Zealand. The resolution demonstrates the importance of cooperation and collaboration in promoting trade and investment, while upholding national interests.
- Canada has reached a mutually satisfactory solution with New Zealand to resolve the CPTPP dairy TRQs dispute.
- The agreement includes technical policy changes aimed at improving transparency and addressing concerns related to supply management.
- New Zealand has confirmed it will not take further action under the CPTPP dispute settlement process.
Follow us on Twitter: @CanadaTrade