New Zealand has initiated dispute settlement proceedings against Canada over dairy quotas.

It's the first time a dispute has been brought forward under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

New Zealand Trade Minister Damien O’Connor said in a statement that the manner in which Canada is implementing dairy tariff rate quotas is inconsistent with its obligations under the CPTPP, adding many of Canada’s dairy tariff rate quotas remain unfilled, representing a tangible loss to New Zealand’s dairy exporters.

New Zealand submitted its request for consultations to Canada on Thursday.

Canada has seven days to respond, after which the two parties will enter formal discussions to try to find a resolution.

If those talks fail, New Zealand can request a panel to adjudicate the dispute.