Canada backdown a win for NZ, says Sutton

Canada's decision to dismantle a dairy subsidy programme is good news for New Zealand, says Trade Negotiations Minister Jim Sutton.

"This enables this long-standing trade dispute to be brought to an end," Sutton said yesterday.

In December 2002, the World Trade Organisation Appellate Body ruled that Canada had continued to provide export subsidies to its dairy exporters, contrary to its WTO commitments.

Notification of a solution to the dispute was lodged by New Zealand and Canada with the WTO in Geneva on Friday.

"That's a good outcome for New Zealand's dairy industry and proves yet again the value of the WTO dispute settlement system to a small trading nation like New Zealand," Sutton said.

The United States, which joined New Zealand in challenging the Canadian export subsidies at the WTO, has reached a similar settlement with Canada.

Sutton said Canada had taken prompt steps to abolish the illegal programme.

Canada's export subsidy scheme cost the New Zealand dairy industry around US$35 million ($61 million) a year in lost returns.

- NZPA