New Zealand locks horns with Canada in dairy trade row

New Zealand's trade minister accused Canada on Monday of having "locked out" his nation's farmers in a dispute over dairy exports destined to be settled by an independent panel.

Damien O'Connor said the Canadians are "not living up" to promises made under a 2018 trans-Pacific free trade agreement to allow dairy products into Canada.

"This is impacting New Zealand exporters, who remain effectively locked out of the Canadian market," O'Connor said in a statement.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership was signed in 2018 by Canada, New Zealand and nine other countries in the Asia-Pacific region.

New Zealand first said in May it had beef with Canada's administration of tariff rate quotas to allow dairy products to be imported with lower import taxes.

New Zealand started dispute settlement proceedings against the Canadians over lost dairy market access -- worth about $40 million over two years -- which "did not resolve matters", O'Connor said.

"New Zealand has therefore made the decision to request the establishment of a panel to hear and decide the dispute," he said.

There has been no official response from Canadian representatives. Diplomatic officials in Wellington said a response would have to come from Ottawa.

The government in Wellington wants three experts on the neutral panel, to be chosen by Canada and New Zealand, to settle the row.

Global dairy exports contributed $10.96 billion to New Zealand's economy in 2021 which was around 23 percent of total exports.