A decision by the World Trade Organisation in Geneva not to rule as illegal a Canadian dairy subsidy scheme is likely to be challenged by New Zealand.

It is estimated that the Canadian scheme, devised to replace one ruled illegal by the WTO in 1999, costs New Zealand NZ$80m (US$33.1m) every year. This is the equivalent of more than NZ$5500 a year for every dairy farmer in the country.

New Zealand’s trade negotiations minister, Jim Sutton, announced yesterday [Tuesday] that the decision by the WTO’s appellate body to refuse to make a ruling on New Zealand’s complaint over the scheme had opened the way for New Zealand to appeal, with co-complainant, the United States.

Sutton added: “While we need to study the ruling closely, our preliminary view is that we will continue the legal challenge.”

“This is not a victory for Canada – far from it.”

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To read about the impact of the WTO’s ruling in Canada yesterday, click here.

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