Big news in the world of trade! Canada and New Zealand have finally resolved their long-standing dispute over dairy product access, much to the relief of stakeholders in both nations.

In a statement released Thursday, Canada’s International Trade Minister Maninder Sidhu and Agriculture Minister Heath MacDonald announced that the agreement, reached after extensive discussions with Canadian dairy interests, will tweak Canada’s tariff rate quota (TRQ) administration. However, it won’t alter Canada’s existing market access commitments.

New Zealand's Trade Minister Todd McClay expressed satisfaction over the resolution, noting that New Zealand exporters will now enjoy enhanced access to the Canadian market. McClay remarked, “Today’s agreement reinforces support for the rules-based trading system,” highlighting a collaborative spirit among the trading partners.

This settlement comes after New Zealand formally challenged Canada in May 2022, alleging that Canada's handling of dairy TRQs under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was inconsistent with international trade rules.

According to the New Zealand government, the new agreement obliges Canada to implement significant changes in how it manages its dairy quotas within the CPTPP framework. While Canada acknowledges these changes will primarily be technical, they promise to make a substantial impact on market dynamics.

Canada's supply management system, which has tightly regulated supplies of dairy, eggs, and poultry since the 1970s through stringent tariffs, continues to be a contentious issue in its trade negotiations, particularly with the U.S. As both nations move forward from this dispute, the implications for their trade relations could be significant.

Stay tuned as we monitor how this resolution unfolds and what it means for consumers and producers alike!