Canada, NZ Settle Dairy Quota Dispute Under CPTPP

Canada and New Zealand have formally resolved a high-stakes dairy trade dispute under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The two countries clashed over Canada's administration of dairy tariff-rate quotas (TRQs), which New Zealand claimed unfairly restricted access for its exporters and favored Canadian processors, violating free trade obligations. New Zealand initiated formal dispute proceedings in May 2022, and in 2023, a CPTPP dispute panel ruled in its favor.

The resolution comes after prolonged negotiations and includes administrative reforms by Canada to improve the transparency and fairness of TRQ allocation without altering its core supply management structure. These adjustments include changes in quota access timelines, penalties for under-utilization, improved data visibility, and a reallocation mechanism for unused quotas. The revised framework will apply starting the 2026 dairy TRQ cycle.

New Zealand estimated that the trade distortion affected dairy export potential worth NZ$129 million to NZ$157 million (USD 80–97 million). With this deal, it expects better access for its cheese, butter, and milk powder products in Canada, although no increase in market size has been granted. The Canadian government reiterated that these changes were made without compromising its dairy farmers' interests or altering market access volumes under CPTPP.

Industry Insight:
This outcome strengthens CPTPP’s credibility in enforcing trade rules and signals to dairy exporters globally that even tightly protected markets like Canada can be held accountable on quota access transparency. For Indian stakeholders eyeing export markets, it underlines the importance of robust TRQ frameworks and dispute resolution mechanisms in future FTAs.

Source : Dairynews7x7 July 19th 2025 Reuters