The first dispute has been initiated under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). On 12 May 2022, New Zealand requested consultations concerning Canada’s implementation of its obligations regarding tariff rate quotas (TRQs). Rather than the high tariffs otherwise applicable to dairy imports, the TRQs provide duty-free access for specified annual quantities of the following dairy products:
TRQ-CA3: Skim Milk Powders
TRQ-CA4: Milk Powders
TRQ-CA5: Cream Powders
TRQ-CA6: Concentrated Milk
TRQ-CA7: Yogurt and Buttermilk
TRQ-CA8: Powdered Buttermilk
TRQ-CA9: Whey Powder
TRQ-CA10: Products Consisting of Natural Milk Constituents
TRQ-CA12: Industrial Cheese
TRQ-CA13: Mozzarella and Prepared Cheese
TRQ-CA14: Cheeses of All Types
TRQ-CA15: Ice Cream and Mixes
TRQ-CA16: Other Dairy
New Zealand is a large exporter of dairy products. It claims that Canada’s implementation of the diary TRQs:
is impacting New Zealand exporters who are not able to fully benefit from the market access that was negotiated under the agreement. Many of Canada’s dairy TRQs remain unfilled and this represents a tangible loss to New Zealand’s dairy exporters. The value to New Zealand of this lost market access is estimated to be approximately $68 million over the first two years, with this expected to increase year on year as the size of these quotas increase under CPTPP”.
Under the CPTPP dispute settlement procedure, Canada has until 19 May 2022 to reply in writing to the request and then has until 11 June 2022 to enter into consultations with New Zealand. If consultations fail to resolve the dispute, New Zealand could request the establishment of a dispute settlement panel as early as 11 July 2022. Assuming the normal timeframes are followed, the panel process will take approximately eight months with a final report issued around March 2023.
Tereposky & DeRose LLP regularly provides advice and acts as counsel in international trade disputes. If you have any questions about the foregoing subject, please do not hesitate to contact us.