The Dairy Companies Association of New Zealand (DCANZ) welcomed efforts to strengthen trade with Canada but said annual talks would be too slow to resolve pressing dairy concerns.
DCANZ has called on the Government to pursue legal dispute resolution if the first round of talks fails to deliver rapid progress. This followed the announcement that New Zealand and Canada will set up an annual trade and investment Dialogue to grow trade and lift exports, and that the dialogue will work through trade issues.
DCANZ has long-standing concerns that subsidised Canadian milk protein exports are harming New Zealand dairy exports.
“A stronger relationship with Canada requires timely resolution of these serious dairy trade concerns. If the first round of talks does not deliver rapid progress, we urge the Government to move to formal, legal dispute resolution,” said DCANZ Chief Executive Kimberly Crewther.
“Canada’s subsidised dairy exports are already harming New Zealand exporters in global protein markets. Its government-backed milk management and pricing system subsidises milk protein for Canadian processors, allowing them to undercut unsubsidised New Zealand exporters.”
Crewther said these trade-distorting practices conflict with Canada’s commitments under the WTO Agreement on Agriculture.
“The commercial stakes are substantial: we estimate Canada’s subsidised dairy protein exports put hundreds of millions of dollars in New Zealand export returns at risk each year.”
DCANZ has previously asked the Government to initiate formal WTO dispute proceedings with Canada and continued to view this binding legal resolution as essential to the way forward.
Although bilateral talks can advance many parts of the New Zealand–Canada trade relationship, Crewther said that after years without resolution on dairy, talks alone are unlikely to be successful.
“Canada has already repeatedly rejected New Zealand’s concerns and has a history of changing trade-distorting practices only after an adverse dispute settlement finding. Legal dispute resolution offers a clear, rules-based path out of the stalemate and a better prospect of resolution than another round of talks without a binding outcome,” she added.
Canada and New Zealand both helped establish the WTO Alternative Dispute Resolution Procedures. Choosing to use an available, rules-based process is not a black mark on the relationship. Instead, it demonstrates confidence in the international trading system and maturity in the bilateral relationship.
DCANZ believed the dairy trade war between the United States and Canada further underscores the urgency of using an independent, rules-based process to address New Zealand’s concerns.
“The North American dispute risks pushing more subsidised Canadian dairy protein into other global markets, making timely legal resolution more urgent, not less.”
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