As part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Canada agreed to provide 10 Trans-Pacific countries with an additional 3.25% of access to its domestic dairy market. This access comprises a wide-range of dairy categories ranging from fluid milk to cheese to yogurt.

How will this impact dairy processors?

DPAC estimates that, at full implementation, CPTPP market access will result in more than $100 million in losses per year for Canada’s dairy processors. According to Global Affairs Canada’s (GAC) own estimates, dairy imports associated with CPTPP will increase by 13% while exports from Canada will increase by a mere 0.5%. This federal government analysis confirms that CPTPP will not benefit Canada’s dairy sector.

Dairy processors have invested over $7.5 billion over the last decade to grow Canada’s domestic dairy market. However, the access that Canada has granted to trading partners through the CPTPP, as well as Canada-EU Comprehensive Economic and Trade Agreement (CETA) and the Canada-United States-Mexico Agreement (CUSMA) will represent a combined loss of $300 million annually when the agreements are fully implemented. These losses do not even reflect the additional concessions made with regard to domestic dairy policies in CUSMA, which promise to be equally or even more harmful.

Mitigating the negative impacts of CPTPP

DPAC welcomed the government’s announcement that dairy processors would receive the vast majority of CPTPP dairy import licenses, known as Tariff Rate Quota (TRQ). This will allow dairy processors to recoup a return on past investments and encourage future investments in the Canadian dairy sector.

However, TRQ alone will not fully mitigate the losses that dairy processors will face because of CPTPP and other trade agreements. DPAC continues to call on the government for a full mitigation program to help dairy processors transition to the new market reality caused by CPTPP, CETA, and CUSMA and ensure the viability of a domestic dairy processing industry for years to come.

More information on CPTPP