New Zealand’s Arguments. 56. Because Article 2.30(1) begins with the phrase “shall … ensure,” New Zealand contends (and Canada accepts) that this is a positive obligation not to limit access. New Zealand then interprets the phrase “limit access to” to mean to restrict to someone (“processors”) the ability to 36 CPTPP art. 2.30, fn. 18. 37 First Written Submission of New Zealand para. 65. 38 While New Zealand discusses the other two clauses in 2.30.(1)(b), it concludes that “the present dispute is concerned primarily with Canada’s obligation to comply with the Processor Clause.” First Written Submission of New Zealand para. 61. 39 First Written Submission of New Zealand paras. 7, 61. 40 Canada’s Comments on the Supplementary Submission of New Zealand para. 9. 41 Initial Written Submission of Canada para. 190; Canada’s Comments on the Supplementary Submission of New Zealand para. 11.
New Zealand’s Arguments. 90. New Zealand contends that the reservation of a set percentage of quota allocations to “processors,” “further processors,” and/or “distributors” set forth in Canada’s Notices to Importers acts to impede the ability of importers to fully utilise the TRQs. For New Zealand, the restrictive and compartmentalized nature of Canada’s pooling system means that if you do not fall within the pool, you do not have the opportunity to utilise any TRQ quantity, let alone utilise the TRQ fully. New Zealand further contends that if you do fall within the pool, you only have access to the quota in that specific pool, not the full TRQ quantity, and the volume of quota you will be allocated will be based on a market share or equal share calculation, irrespective of how much quota you have requested.78
New Zealand’s Arguments. 134. For New Zealand, Canada’s obligation under Article 2.30(1)(a) is to allow all persons who meet the eligibility requirements set out in Appendix A to Canada’s Tariff Schedules to apply and be considered for a quota allocation.109 New Zealand reads the reference in Article 2.30(1)(a) to “eligibility requirements” to mean only the eligibility requirements that are set out in Canada’s Tariff Schedule. 135. New Zealand then examines Canada’s Tariff Schedule, particularly Paragraph 3(c) of Appendix A, and finds that Canada has limited itself to employing three eligibility criteria, limiting eligible applicants for quotas to 1) residents of Canada, 2) who are active in the applicable Canadian dairy sector, and 3) who are compliant with the EIPA and its regulations. For New Zealand, any attempt by Canada to add new or additional eligibility requirements would be inconsistent with both Article 2.30(1)(a) and Article 2.29(2)(a).110 136. New Zealand then examines Canada’s 16 Notices to Importers, noting that 11 of them require that an applicant be a “processor,” a “further processor,” or a “distributor” in order to be eligible for an allocation, four require that an applicant be either a “processor” or a “distributor” while one Notice limits eligible applicants to those that are a “processor” or a “further processor.”111 New Zealand then concludes that applicants that meet the eligibility criteria under Canada’s Appendix A such as retailers, but do not meet these additional eligibility criteria contained in Canada’s Notices to Importers, are not able to apply for or be considered for a quota allocation, which for New Zealand is contrary to Canada’s obligation under Article 2.30(1)(a).
New Zealand’s Arguments. 161. New Zealand contends that each of Canada’s pools (processor, further processor, and distributor) as set out in Canada’s Notices to Importers introduce new limits and eligibility requirements on the utilisation of a TRQ beyond those set out in Canada’s Tariff Schedule to Annex 2-D. The pools created under the Notices for each of Canada’s 16 dairy TRQs are each a new limit on the utilisation of that TRQ because they prevent entities other than those in the pool from being able to access or use the quota.117 162. New Zealand also considers that these limits have the collective effect of introducing new eligibility requirements because they require quota applicants to be a particular type of business and that requirement was not included in Canada’s Annex 2-D Tariff Schedule.118 163. New Zealand argues that the phrase “utilisation of a TRQ for the importation of a good” applies to all phases of the process of utilising a quota: obtaining an allocation, importing the product into market, and claiming preferential treatment.119 Therefore, Canada’s Notices to Importers, which address the eligibility to apply for a quota allocation are part of obtaining an allocation and are included within the ambit of Article 2.29(2)(a)’s prohibition on new limits. If Canada wished to introduce its pooling system as part of its allocation mechanism, it was required to use the process for the introduction of new limits and eligibility requirements set out in Article 2.29(2)(b)-(c).120 164. For New Zealand, the term “eligible” and “eligibility” are used consistently in Section D to refer to the eligibility of importers to apply for an allocation.121 Thus, the reference to “utilisation of a TRQ” in Article 2.29(2)(a) must mean that the scope of the provision includes the allocation phase. Eligibility for an allocation is a people-focused term so the provision must apply to more than product-focused conditions, limits, and eligibility requirements.
