New Zealand Trade Minister Todd McClay declared on Friday that Canada has agreed to open its market to New Zealand dairy products, resolving a longstanding trade disagreement. New Zealand dairy exports were previously restricted from accessing the Canadian market, even though such restrictions violated the terms of the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) trade agreement.

McClay stated that Canada has agreed to adjust its dairy import quotas, a move expected to generate up to $157 million in benefits for New Zealand dairy producers.
“The government is pleased that this dispute has now been settled, and New Zealand exporters are guaranteed better access to the Canadian market,” he said.

In 2022, New Zealand formally initiated dispute settlement proceedings in response to Canada’s restrictions on dairy exports, which violated CPTPP commitments. A dispute panel later ruled in New Zealand’s favour; however, Canada did not fully implement the panel’s decision. As a result, New Zealand warned of potential countermeasures last year, including retaliatory tariffs targeting Canadian exports.

Canada noted that the adjustments were made in close coordination with its domestic dairy industry and will only result in modest changes to existing policies.

Under the agreement, Canada has pledged to revise its dairy quotas under the CPTPP. The changes include providing New Zealand exporters with quicker and more efficient access to quotas, reallocating unused quota volumes, and imposing penalties on importers who fail to comply with quota rules.

McClay remarked that Canada has long been a close ally and valued trade partner of New Zealand, adding that the ‘constructive engagement’ led to a resolution.
In a statement, Canadian Agriculture Minister Heath MacDonald described the outcome as a ‘mutually satisfactory’ agreement.’

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