Todd McClay: Trade Minister on the mandatory negotiations with Canada in the ongoing dairy dispute

The Government says New Zealand's now standing up for itself against Canada in an ongoing dispute over our dairy exports. 

Trade Minister Todd McClay has launched mandatory negotiations with Canada to address its failure to comply with agreements by blocking the ability for New Zealand dairy to be sold in the country. 

He told Mike Hosking an independent panel has already ruled in our favour, and Canada will now have to act differently. 

McClay says they will either have to change their process or pay our Government compensation, but can't do nothing. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
New Zealand and Canada trade scrap rolls on. This is
the CPTPP arbitration didn't work. So when our requesting formal negotiations,
essentially our dairy products are being blocked despite the fact
we've got access deal trade mins to Tom mclayback with
us on this.

Speaker 2 (00:11):
Good morning, Mike, good morning.

Speaker 1 (00:13):
This is not supposed to be what free trade is
all about, is it.

Speaker 2 (00:16):
Yeah, that's right. Look, Canada entered into an agreement with us.
They knew what they were doing when they came down
to Auckland and signed it. It's incidentally the same government
for not honoring it. So we've decided to take the
next step in the formal legal procedure to get them
to allow dairy products to be sold in Canada.

Speaker 1 (00:33):
Does this go anywhere tangible or useful though, because so
far it just seems to be a lot of wow
wow wah.

Speaker 2 (00:38):
Yeah. So the system is set up so there is
a lot of talking. And look, we get on well
with Canada, we're good friends with them. We do a
lot on the world stage, but we disagree on this one.
That panel found in our favor. They made changes, but
they are not significant. They still are not meeting their obligation.
Now they formally must come to consultation with us within
fifteen days. If we don't reach agreement days after that,

(01:00):
we're able to take additional action, which can be looking
at the losses of New Zealand suffers. We have the
option to put tariff rates back on their trade. I
hope it doesn't get to that, kid. You can do
one to go ahead, would you. Well, we're not ruling
anything out. We reserve the right to take action. We're
taking this very seriously. Although the amount of trade is

(01:22):
not significant compared to the twenty five billion dollars worth
of dairy we sell around the world. We're a small country.
We honor our obligations and trade deals. We take them seriously.
You've got to stand up for yourself.

Speaker 1 (01:31):
Which principle exactly are we indisputably right?

Speaker 2 (01:37):
Yes we are, because when we negotiated an agreement, it
said that New Zealand had a right to sale a
certain quota of low tariff into that market. The way
that Canada has arranged their system blocks us and stops
us doing that, so New Zealand exports are worse off.
You know, the tribunal found in our favor. It wasn't easy.
We had to make the case and therefore we are right.

(01:59):
So Canada can do one of two things. They can
make changes or they can pay us compensation. They don't
have the option to do nothing.

Speaker 1 (02:05):
Are they bad actors?

Speaker 2 (02:07):
Well, look, I don't want to speak ill because we're
about to go. And why not stiffing negotiation? Yeah, well
negotiations with them. But they have a bit of record
of doing this around the country, you know, around the world.
In this case, we've decided to stand up for them,
stand up to them. It's the first time that this
system has been used under the cp TPP. New Zealand
has never put tariff sanctions against any country before. But

(02:29):
I send them a really clear signal they owe us,
pay us all. We're coming after you.

Speaker 1 (02:33):
Good stuff, Todd, appreciate you have a good weekend. Tom McLay,
Who's our Trade Minute.

Speaker 2 (02:37):
For more from the Mic Asking Breakfast, listen live to
news talks they'd be from six am weekdays, or follow
the podcast on iHeartRadio.