CANADA - MEASURES AFFECTING THE IMPORTATION OF MILK AND THE EXPORTATION OF DAIRY PRODUCTS
Document: Recourse by New Zealand to Article 22.2 of the DSU
Date: 19 February 2001
Document codes: WT/DS113/17; WT/DS103/10; WT/DS113/10
Complainant: New Zealand
Respondent: Canada
Third parties: Argentina, Australia, EU, Japan, Mexico, U.S.
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. 3, 8, 9, 10  AgricultureArt. X:1  GATT 1994

CANADA - MEASURES AFFECTING THE IMPORTATION OF MILK
AND THE EXPORTATION OF DAIRY PRODUCTS
Recourse by New Zealand to Article 22.2 of the DSU
The following communication, dated 16 February 2001, from the Permanent Mission of
New Zealand to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 22.2
of the DSU.
On 23 December 1999, pursuant to Article 21.3(b) of the Understanding on Rules and
Procedures Governing the Settlement of Disputes (DSU), Canada, the United States and New Zealand
agreed (; ) on the reas onable period of time for implementation of the
recommendations and rulings of the Dispute Settlement Body (DSB) in "" (WT/DS113). According to the terms
of the 23 December 1999 agreement, as amended on 11 December 2000 (,
), the staged implemen tation process, “including any new measures for the export of”
dairy products, was to be completed by 31 January 2001. New Zealand considers that Canada has
failed to comply with the above mentioned recommendations and rulings of the DSB within that
timeframe or since the expiry of the period.
Pursuant to Article 22.2 of the DSU, New Zealand requests authorization from the DSB to
suspend the application to Canada of tariff concessions and other obligations under the General
Agreement on Tariffs and Trade 1994 (GATT 1994) covering trade in the amount of US$35 million.
This level of suspension is equivalent on an annual basis to the level of nullification or impairment of
benefits accruing to New Zealand resulting from Canada’s failure to bring its export subsidy measures
concerning dairy products into compliance, by 31 January 2001, with the Agreement on Agriculture
or otherwise comply with the recommendations and rulings of the DSB.
New Zealand intends to take countermeasures and suspension of concessions in the form of
the suspension of tariff concessions and related obligations under the GATT 1994 by imposing duties
in excess of bound rates on a list of products drawn from the indicative list attached (Annex).
In accordance with the Understanding between Canada and New Zealand Regarding
Procedures under Articles 21 and 22 of the DSU (WT/DS113/14), New Zealand will not object to the
referral of an objection by Canada to the level of suspension of concessions or other obligations to
arbitration pursuant to Article 22.6 of the DSU. In this case New Zealand will agree to request the
arbitrator to suspend its work until either (a) the adoption of the Article 21.5 compliance panel report;
or (b) if there is an appeal, the adoption of the Appellate Body report.

ANNEX
HS Description
2 Meat and edible meat offal
3 Fish and crustaceans, molluscs and other aquatic invertebrates
4 Dairy produce; birds’ eggs; natural honey; edible products of animal origin, not
elsewhere specified or included
5 Products of animal origin not elsewhere specified or included
7 Edible vegetables and certain roots and tubers
8 Edible fruits and nuts; peel of citrus fruits or melons
10 Cereals
11 Products of the milling industry; malt; starches; inulin; wheat gluten
12 Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or
medical plants; straw and fodder
14 Vegetable plaiting materials; vegetable products not elsewhere specified or included
13 Lacs, gums, resins and other vegetable saps and extracts
15 Animal or vegetable fats and oils and their cleavage products; prepared edible fats;
animal or vegetable waxes
16 Preparations of meat, fish or crustaceans, molluscs or other aquatic invertebrates
17 Sugars and sugar confectionery
18 Cocoa and cocoa preparations
19 Preparations of cereals, flour, starch or milk; pastrycooks' products
20 Preparations of vegetables, fruits, nuts, or other parts of plants
21 Miscellaneous edible preparations
22 Beverages, spirits and vinegar
23 Residues and waste from the food i ndustries; prepared animal fodder
25 Salt; sulphur; earths and stone; plastering materials, lime and cement
26 Ores, slag and ash
28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth
metals, of radioactive elements or of isotopes
29 Organic chemicals
30 Pharmaceutical products
31 Fertilisers
32 Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other
colouring matter; paints and varnishes; putty and other mastics; inks
33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations
34 Soaps, organic surface-active agents, washing and lubricating preparations, artificial
waxes, prepared waxes, polishing or souring preparations, candles and similar articles,
modeling pastes, "dental waxes", dental preparations with a basis of plaster
35 Albuminous substances; modified starches; glues; enzymes
37 Photographic or cinematographic goods
38 Miscellaneous chemical products
39 Plastic and articles thereof
40 Rubber and articles thereof

HS Description
44 Wood and articles of wood; wood charcoal
48 Paper and paperboard; articles of paper pulp, paper or paperboard
49 Books, newspapers, pictures and other products of the printing industry; manuscripts,
typescripts and plans
52 Cotton
54 Man-made filaments
55 Man-made staple fibres
56 Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cable and
articles thereof
57 Carpets and other textile floor coverings
58 Special woven fabrics
59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind
suitable for industrial use
60 Knitted or crocheted fabrics
61 Articles or apparel and clothing accessories, knitted or crocheted
62 Articles or apparel and clothing accessories, not knitted or crocheted
63 Other made up textile articles; sets; worn clothing and worn textile articles; rags
65 Headgear and parts thereof
68 Articles of stone, plaster, cement, asbestos, mica or similar materials
69 Ceramic products
70 Glass and glassware
71 Natural or cultured pearls, precious or semi-precious stones, precious metals, metal clad
with precious metal, and articles thereof; imitation jewellery; coins
72 Iron and steel
73 Articles of iron and steel
74 Copper and articles thereof
75 Nickel and articles thereof
76 Aluminium and articles thereof
79 Zinc and articles thereof
81 Other base metals; cermets; articles thereof
82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal
83 Miscellaneous articles of base metal
84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers,
television image and sound recorders and reproducers, and parts and accessories of such
articles
86 Railway or tramway locomotives, rolling stock and parts thereof; railway or tramway
track fixtures and fittings and parts thereof; mechanical (including electro-mechanical)
traffic signalling equipment of all kinds
87 Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof
88 Aircraft, spacecraft, and parts thereof
89 Ships, boats and floating structures
90 Optical , photographic, cinematographic, measuring, checking , precision, medical or
surgical instruments and apparatus; parts and accessories thereof
91 Clocks and watches and parts thereof
92 Musical instruments; parts and accessories of such articles

HS Description
93 Arms and ammunition; parts and accessories thereof
94 Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed
furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated
signs, illuminated name-plates and the like; prefabricated buildings
95 Toys, games and sports requisites; parts and accessories thereof
96 Miscellaneous manufactured articles