Source: Dairy Companies Association of New Zealand (DCANZ)
The Dairy Companies Association of New Zealand (DCANZ) has joined with United States and Australian dairy industry representatives in calling for government action to address the impacts that Canada’s trade delinquency is having on world dairy protein markets.
An 8 January letter to the trade and agriculture Ministers of New Zealand, the United States and Australia details a collective concern that artificially low-priced Canadian dairy protein exports are undermining legitimate export interests. Collective and coordinated action is requested to address the mechanisms being used by Canada to enable these exports to be dumped on world markets.
Of concern is the purposeful design of Canada’s milk pricing mechanisms to under-price the surplus milk protein generated by its domestic supply management system and incentivise disposal onto world markets. Canadian dairy processors’ ability to access milk proteins at below Canada’s cost of production is distorting its export of a range of dairy products.
DCANZ Executive Director Kimberly Crewther says “Canada’s policy approach is at odds with its international trade obligations in much the same way as previous Canadian dairy pricing policies were found to breach WTO export subsidy rules in the past”.
The joint-call is for the Governments of New Zealand, US, and Australia to actively pursue the issue using all available tools. New Zealand and Australia are signatories, alongside Canada, to the Multi-Party Interim Appeal Arbitration Arrangement to maintain the enforceability of WTO rules. For the US the upcoming review of the USMCA agreement offers opportunities.
The letter highlights that action to curb these harmful Canadian policies is a matter of urgency with the imminent prospect of further Canadian processing investment premised on this access to below-cost milk protein. For the New Zealand industry, this issue is additional to the legal dispute about Canada’s limiting of access to CPTPP dairy quotas.
“It is an ongoing battle to ensure Canada upholds its trade commitments on dairy” says Crewther. “DCANZ is pleased to be working with industry organisations from other dairy exporting nations who share the objective of holding Canada to account for its dairy trade commitments.”
