A disputes-settling panel has begun hearings in Ottawa to deal wih a complaint filed by New Zealand that dairy import quota administration frustrates trade.
Canada is responding that New Zealand is misinterpreting trade rules and arguing for the “absurd” in its battle over dairy quotas.
According to the Dairy Association of New Zealand, Canada only allowed eight per cent of its import quota to be filled last year, leading to $55-million in lost market access for New Zealand over the past two years.
It is the first panel hearing under the Trans-Pacific Partnership, a trade deal signed in 2018 by 11 countries, including Canada, New Zealand, Mexico, Japan and Australia.
The panel’s decision, which is binding, is expected by September.
New Zealand argues in its submission that processors do not have a high demand for imports, leading to “chronic underfill of quotas.”
Processors also import cheaper products than retailers, who would – if given more quotas – import more expensive goods, such as ice cream and yogurt, the submission says.
New Zealand is arguing that Ottawa’s allocation system is designed to give quotas to the types of Canadian businesses that do not want New Zealand’s imports, while denying imports to those who do have a high demand for the products.
It contends that Canada is therefore in violation of the rules of the Trans-Pacific Partnership, which state that TRQs cannot be “administratively burdensome” and cannot limit quotas available to retailers.
Ottawa says it has the right to place limitations on TRQs and that New Zealand’s argument “sacrifices principled, consistent and credible legal interpretations.”
