Canada is giving no assurances it will ease New Zealand dairy access, despite rulings finding Ottawa’s policies conflict with the principles of the Comprehensive and Progressive Trans Pacific Partnership (CPTPP).
But the country’s Trade Minister Mary Ng does say discussions are continuing. She was speaking to reporters after talks in Vancouver with trade ministers from CPTPP member states.
Elsewhere, she poured cold water on the prospects of either China or Taiwan joining CPTPP, without mentioning either by name. However, Britain’s accession on December 15 and Costa Rica’s application were welcomed.
New Zealand has always argued that Canada is breaching CPTPP rules by favouring local dairy producers over imports, at a cost of up to $200 million in lost sales for this country. NZ initiated the dispute in late 2022, saying Canada was breaching the rules of the CPTPP by blocking dairy exporters’ access to its market.
A CPTPP panel essentially sided with New Zealand, and in the most recent development, negotiations commenced at the start of this month. But asked about this dispute, Ng made only general comments, and defended the principle of a tightly regulated dairy industry in Canada that determines volumes and prices via central planning.
“Canada and New Zealand are close trading partners,” Ng said.
“I know our officials have been having very productive discussions, but even good, close trading partners will have disagreements from time to time. That’s why rules-based trade is important.
“We know we can defend the supply-managed sector here, but look, you know New Zealand is an important partner to Canada, and we are engaged in resolving this in a good faith. So, I’m looking forward to continuing that work”.
New Zealand’s Trade Minister Todd McClay made clear New Zealand would continue its fight, while saying he strongly supported CPTPP, which was a “very high-quality agreement."
“But from time to time we don’t agree, and in this case the New Zealand Government has a view that Canada is not meeting its obligations to us,” he said.
“And that is the reason that the dispute settlement process has been set out, and both parties are working through that constructively. There have been meetings and they are ongoing," McClay said.
“This is an issue that is extremely important for New Zealand and one which we will continue to pursue. We have the ability to continue to work constructively through the CPTPP and disagree on one issue, and we will be very focused on that.”
The CPTPP has 11 member nations, representing about one seventh of global GDP. It represents over a third of New Zealand’s total trade, worth $64 billion. Many other countries want to join it, with Britain being the latest, even though it is situated far away from the Pacific.
Both China and Taiwan want to join, which would create an obvious diplomatic problem for the CPTPP secretariat. Asked about China, Ng appeared to downplay its chances of getting into the agreement. Without mentioning China by name, she implied that China failed to meet the same standards that were met by the latest country to get to the front of the CPTPP queue, Costa Rica.
“We are very proud to initiate an accession working group for Costa Rica,” she said.
“But we took a very rigorous process this year during Canada’s chairmanship, based on the Auckland Principles, which include the following: A commitment to meet the high standards of CPTPP, a track record of meeting trade obligations and achieving consensus among the CPTP partners for the accession of that economy. Costa Rica has met those principles. I would say to all of the countries that have expressed interest to apply, that that work will continue.”
Since they emerged at an earlier CPTPP conference, in 2023, the Auckland Principles have bedded into CPTPP thinking regarding all new member applications.
The same principles appear to stand in the way of Taiwan joining CPTPP, because there is unlikely to be consensus, when some states might fear angering China.
“We remain completely open to having new members join the CPTPP, we think that is good,” Ng said.
“But the work that we have done this year has applied objective criteria….and that includes reaching consensus among all members of the CPTPP. Here in Canada, our one-China policy has not changed at all….but the work that we do together as CPTPP partners is that we work on consensus and consensus means all of the partners would need to agree in order for us to move to that next step.”
Ng also discussed the tariffs now been proposed by the incoming president of the United States, Donald Trump. Trump indicated this week he would impose a 25% tariff on all goods coming from Mexico and Canada immediately after inauguration, with an extra tariff on China. Ng declined to give details about her country’s response to this, other than to say her Government would work constructively with the Trump administration, while working hard to protect Canadian interests.
In an earlier comment on the dairy dispute with New Zealand, Ng and Canada's Agriculture Minister Lawrence MacAulay, took a much harder line than her remarks in Vancouver.
“Canada is very disappointed that New Zealand has decided to continue to challenge Canada’s dairy Tariff Rate Quota (TRQ) system,” they said in a joint statement.
“We have been through this before and have consistently and successfully defended our dairy sector and supply management from trade challenges under the Canada United States and Mexico Agreement (CUSMA) and the CPTPP.
“The Government of Canada will always defend our supply management, firmly standing up for Canada’s dairy industry, farmers and workers and the communities they support.”
This dispute is partly driven by the political strength of the Canadian dairy farmer lobby, which enjoys guaranteed prices and production quotas. The system keeps incomes for Canadian farmers and prices for consumers high.
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