New Zealand dairy manufacturers join protest against Canadian "protection"

New Zealand's pillar dairy industry has joined counterparts in the United States, Australia, Europe and Mexico in calling for World Trade Organization (WTO) action against Canada's dairy trade protection plans.

The Dairy Companies Association of New Zealand (DCANZ) on Tuesday said it was a joint signatory to a letter to trade ministers setting out concerns at Canada's planned to extend protections.

A recently concluded agreement between Canadian dairy producers and processors would provide an incentive to substitute Canadian dairy ingredients for imported dairy ingredients and would unfairly subsidize exports of Canadian dairy products, said a DCANZ statement.

The agreement would provide a guaranteed price for milk used to manufacture ingredient dairy products, including skim milk powder and milk protein concentrate, which was below the cost of production and matched the lowest globally traded reference price for those products.

"This will result in trade diversion and global price suppression," DCANZ executive director Kimberly Crewther said in a statement.

"It contravenes Canada's WTO obligations and undermines the intent of the TPP (Trans-Pacific Partnership) agreement that Canada signed earlier this year."

DCANZ considered Canada to be amongst the most protectionist countries in global dairy trade, with tariff rates of up to 300 percent prohibiting most trade outside of limited quota volumes.

New Zealand had previously taken and won a WTO case against Canada for use of illegal export subsidies. Endit