Agriculture Minister Damien O’Connor is claiming New Zealand dairy exporters are being unfairly “locked out” of the Canadian market, worth almost $70 million over two years, and is calling for a panel to hear the dispute.

New Zealand first lodged its concern in May regarding Canada’s administration of dairy tariff rate quotas (TRQs) under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

A TRQ allows a certain amount of a product (the quota) to be imported with lower import taxes (tariffs).

 “Canada is not living up to the commitments it made under CPTPP to allow dairy products into Canada,” O’Connor said.

 “This is impacting New Zealand exporters, who remain effectively locked out of the Canadian market, and Canadian consumers, who are missing out on the increased consumer choice that CPTPP promises.”

The value to New Zealand of the lost market access was estimated to be approximately $68 million over the first two years, and was expected to increase year-on-year as the size of these quotas increased under CPTPP.

New Zealand requested formal talks with Canada on May 12, which took place in June but they “did not resolve matters”, according to O’Connor.

New Zealand dairy exporters are being "locked out" of the Canadian market. Photo / NZME

That prompted today’s decision to request a panel to hear and decide upon the dispute. Both countries would now be working through the selection of three individuals to act as panellists.

“This is ultimately about ensuring that our exporters can access the benefits that were agreed under CPTPP,” O’Connor said.

• NZ launching trade dispute against Canada in growing dairy backlash

“These were hard-won negotiated outcomes, and it is important that our exporters have confidence and certainty in their ability to enjoy them.”

When the dispute was announced in May, O’Connor repeatedly stated the value of Canada and New Zealand’s relationship, saying the country was one of New Zealand’s closest partners, he appreciated Canada’s engagement on the issue and that “even good friends disagree”.

O’Connor’s praise for Canada was slightly less forthcoming today but he echoed his comments from May by saying, “New Zealand continues to value its strong friendship with Canada, one of our warmest and closest relationships in the world”.

This was New Zealand’s first dispute under the CPTPP, although New Zealand had initiated disputes under the World Trade Organisation.