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<p><font size="+1"></font><font size="+1"><strong>September 23, 2002 <em>(4:30 p.m. EDT)</em> No. 107</strong></font></p>
<p align="CENTER"><font size="+1"><strong>CANADA APPEALS WTO DAIRY RULING</strong></font></p>
<p>The Government of Canada today appealed a World Trade Organization (WTO) Compliance Panel Report that concluded
that Canada's commercial export milk approach does not comply with WTO obligations. </p>
<p>"We believe that there are compelling legal grounds for appealing the Compliance Panel Report," said International Trade
Minister Pierre Pettigrew. "We have made extensive changes to our dairy exports since the adoption of the original Panel
and Appellate Body reports in this case, to ensure full conformity with our international obligations."</p>
<p>"We worked closely with the provinces and industry to prepare our appeal," said Lyle Vanclief, Minister of Agriculture and
Agri-Food. "With our appeal, we hope to lay this dispute to rest once and for all, allowing our dairy sector to focus on
creating the world-leading dairy products it is known for."</p>
<p>On July 26, 2002, a WTO Compliance Panel found Canada's export of dairy products to be subsidized. This decision
emerged from a second request by the United States and New Zealand for a review of Canada's commercial export milk
approach. Last December, the Appellate Body of the WTO found that the United States and New Zealand had failed to
prove that Canada's commercial milk approach was inconsistent with WTO obligations. </p>
<p>The WTO dairy dispute began in March 1998, when the United States and New Zealand first launched a formal complaint
with the WTO challenging Canada's dairy export system. The United States and New Zealand argued that Canadian dairy
exports benefited from export subsidies under the rules of the WTO Agreement on Agriculture and were subject to
Canada's WTO export subsidy reduction commitments.</p>
<p>In 1999 the WTO ruled in favour of the United States and New Zealand, and since that time, Canada has changed the way
milk destined for exported dairy products is marketed. Based on the ruling, and following consultation with the provinces
and industry, federal and provincial governments have removed themselves from export activities. Exported milk is now
bought and sold in accordance with market demands. Despite these changes, the United States and New Zealand have
continued to challenge Canadian dairy export practices.</p>
<p>The Appellate Body is expected to make its decision by late December 2002. </p>
<p>For further information, please consult the following backgrounders: </p>
<p>Chronology: Canada-United States-New Zealand WTO Dairy Dispute</p>
<p><a href="https://bac-lac.wayback.archive-it.org/web/20061209062420/http://www.dfait-maeci.gc.ca/tna-nac/chronological-e.asp">http://www.dfait-maeci.gc.ca/tna-nac/chronological-e.asp</a></p>
<p>WTO Dairy Challenges</p>
<p><a href="https://bac-lac.wayback.archive-it.org/web/20061209062420/http://www.dfait-maeci.gc.ca/tna-nac/rulings-e.asp">http://www.dfait-maeci.gc.ca/tna-nac/rulings-e.asp</a> </p>
<p>All About Canada's Dairy Industry</p>
<p><a href="https://bac-lac.wayback.archive-it.org/web/20061209062420/http://www.dfait-maeci.gc.ca/tna-nac/about_can-e.asp">http://www.dfait-maeci.gc.ca/tna-nac/about_can-e.asp</a></p>
<p>- 30 -</p>
<p>For more information, media representatives may contact: </p>
<p>Sébastien Théberge</p>
<p>Director of Communications</p>
<p>Office of the Minister of International Trade</p>
<p>(613) 992-7332</p>
<p>Media Relations Office</p>
<p>Department of Foreign Affairs and International Trade </p>
<p>(613) 995-1874</p>
<p>Donald Boulanger</p>
<p>Press Secretary</p>
<p>Office of the Minister of Agriculture and Agri-food</p>
<p>(613) 759-1761</p>
<p>Media Relations</p>
<p>Agriculture and Agri-Food Canada</p>
<p>(613) 759-7972</p>
<p>This document is also available on the Department of Foreign Affairs and International Trade's Internet site:
<a href="https://bac-lac.wayback.archive-it.org/web/20061209062420/http://www.dfait-maeci.gc.ca/">http://www.dfait-maeci.gc.ca</a></p>
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