September 6, 2023 – The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) dispute settlement panel published its report yesterday on Canada’s administration of its tariff rate quotas (TRQs) on imports of dairy products.
The panel found that Canada’s practice of creating TRQ pools exclusively for processors is inconsistent with Canada’s obligations under the agreement. This mirrors the finding of the CUSMA Panel decision on the same issue in 2021.
Importantly, on the key aspect of eligibility criteria, the Panel found that Canada’s inclusion of additional criteria for eligible applicants for a TRQ allocation falls within the discretion provided to Canada in designing its allocation mechanism, and is therefore consistent with Canada’s CPTPP obligations. DPAC views this as a very important recognition.
Canada will still need to ensure that its TRQ allocation mechanism conforms to the CPTPP Panel’s decision by ensuring that a share (or ‘pool’) of a total TRQ is not reserved exclusively for the use of dairy processors. DPAC will work with the government to identify options to bring its CPTPP allocation mechanisms into compliance.
A joint statement from the Minister of Export Promotion, International Trade and Economic Development and the Minister of Agriculture and Agri-Food is available here.