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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>GOVERNMENT SEEKS INPUT ON POSSIBLE RETALIATION AGAINST AUSTRALIA</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> May 28, 1999 (4:15 p.m. EDT) No. 123 GOVERNMENT SEEKS INPUT ON POSSIBLE RETALIATION AGAINST AUSTRALIA The Government of Canada is seeking public input on a proposal to impose a surtax on imports of certain Australian products if Australia does not lift its 24-year-old ban on imports of fresh, chilled and frozen salmon by July 6, 1999. Canadians are being asked to comment on the list of products that might be subject to a surtax. The list will be published in the Canada Gazette on May 29, 1999, and comments are requested by June 28, 1999. In June 1998, a World Trade Organization (WTO) panel ruled that Australia's ban was scientifically unjustified and discriminatory, and contrary to Australia's international trade obligations. An Australian appeal to the WTO Appellate Body failed. In February 1999, a WTO arbitrator gave Australia until July 6, 1999, to implement the WTO rulings. "To date, Australia has shown no sign of lifting the ban," said International Trade Minister Sergio Marchi. "That is why we are preparing to defend Canadian interests and why we are consulting with the public on building a list of imported products that could be taxed." "Canada's sole objective in this case remains having unfettered access to the Australian market," said Fisheries and Oceans Minister David Anderson. "After all, Canadian salmon is renowned for its quality and we export fresh and frozen salmon to approximately 50 countries around the world." If Australia fails to implement the WTO ruling on July 6, WTO rules allow Australia to negotiate compensation with Canada as an interim arrangement until it brings its measure into compliance with the rulings. If an agreement on compensation cannot be reached, the Canadian government will ask the WTO to allow Canada to retaliate. Upon receiving the WTO's authorization to retaliate, the government will select certain imported products from the list it published in the Canada Gazette and impose a surtax of 100 percent above existing customs duties on the items in question. Australia's ban was first introduced in 1975 after Australia alleged that imports of fresh, chilled and frozen salmon presented a health risk to Australia's salmon population. After years of unsuccessful bilateral efforts to resolve the dispute, the WTO Dispute Settlement Body established a panel on April 10, 1997, at Canada's request. More detailed background documents including the Canada Gazette notice will be available under "news releases" on the Department of Foreign Affairs and International Trade Web site. - 30 - For further information, media representatives may contact: Leslie Swartman Office of the Minister for International Trade (613) 992-7332 Media Relations Office Department of Foreign Affairs and International Trade (613) 995-1874 This document is also available on the Department of Foreign Affairs and International Trade Web site: http://www.dfait-maeci.gc.ca Backgrounder <ul> <li>In 1975, Australia introduced a quarantine measure requiring salmon products to be heat-treated prior to importation into Australia. The result of this measure was to prohibit the importation of fresh, chilled and frozen salmon, effectively limiting importation of salmon to either smoked or canned salmon.</li> <li>The reason given by Australia for this prohibition on the importation of fresh, chilled and frozen salmon was allegedly to protect Australia's salmon population from the introduction of pathogens which could be responsible for various fish diseases.</li> <li>Canada has maintained all along that trade in dead, eviscerated salmon for human consumption does not present a risk of spreading fish diseases to Australia's salmon population.</li> <li>Canada is not alone in defending this position. Evisceration of fish for human consumption has become the internationally accepted practice for sanitary protection against the onset of disease in a country's fish population. </li> <li>Australia stands alone among major fish-trading countries in prohibiting the importation of uncooked salmon. Canada, the United States, the United Kingdom, Norway and the European Union impose no additional quarantine restrictions on the importation of dead, eviscerated salmon. </li> <li>For more than two decades, Canada has made sincere efforts to resolve this dispute with Australia but has been unsuccessful.</li> </ul> <ul> <li>In 1994, following numerous bilateral meetings, Canada held General Agreement on Tariffs and Trade (GATT) consultations to press Australia to review the ban. Following the consultations, Australia agreed to conduct an Import Risk Assessment (IRA) of wild Pacific salmon imports.</li> <li>In May 1995, Australia issued a draft IRA, which concluded that imports of wild, headed, and gutted Pacific salmon from Canada and the United States should be permitted. These findings were endorsed by two further reports released by the Australian Bureau of Resource Sciences and the Commonwealth Scientific Industrial Organization. </li> <li>The draft IRA encountered strong domestic opposition in Australia, mainly from the Tasmanian salmon cultivators and some sport fishing groups.</li> <li>As a result, Australia undertook to conduct a comprehensive review of all the comments made on the original IRA and to publish a second version of the draft IRA.</li> </ul> <ul> <li>In November 1995, Canada held WTO consultations with Australia in a further attempt to resolve the issue. These consultations were unsuccessful.</li> <li>After many delays, Australia released a revised IRA for public comment in May 1996. Canada objected to the revised IRA on the basis that it backtracked from the conclusions of the original IRA of May 1995.</li> <li>In December 1996, Australia finalized the IRA and announced that based on the IRA, the import ban would be maintained on imports of Canadian fresh, chilled, and frozen salmon.</li> <li>Canada reviewed the December 1996 IRA and concluded that Australia had not presented any new evidence to support the ban. </li> <li>On April 10, 1997, a World Trade Organization (WTO) Dispute Settlement Panel was established to hear Canada's complaint. </li> <li>On June 12, 1998, the Panel found that Australia's ban on fresh, chilled and frozen salmon from Canada is not based on a risk assessment, is maintained without scientific evidence and reflected an arbitrary and unjustifiable distinction in levels of protection that results in discrimination or a disguised restriction on trade, in violation of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement). </li> <li>Australia appealed the Panel's findings on July 22, 1998.</li> <li>On October 20, 1998, the WTO Appellate Body confirmed that Australia's ban on imports of Canadian fresh, chilled and frozen salmon, both wild and cultivated, violates Australia`s WTO obligations. </li> <li>On November 6, 1998, the WTO Dispute Settlement Body adopted the WTO Panel and Appellate Body reports.</li> </ul> <ul> <li>On February 22, 1999, a WTO arbitrator gave Australia until July 6, 1999, to implement the WTO rulings.</li> <li>To comply with the WTO rulings, Australia must remove its ban by July 6, 1999. </li> <li>To date, Australia has not taken any domestic steps to remove its ban on Canadian fresh, chilled and frozen salmon. Instead, it has decided to perform yet more studies, despite the fact that in the 24 years since the ban, Australia has not been able to come up with credible scientific evidence to justify the ban.</li> <li>If Australia is not in compliance by July 6, 1999, the WTO provides that Canada and Australia may enter into discussions on compensation as a temporary solution until Australia implements the WTO rulings. If an agreement on compensation cannot be reached, Canada has the right to request the WTO Dispute Settlement Body to authorize retaliation. </li> </ul> <ul> <li>Under WTO rules, Canada will have 30 days from July 6 to request authorization from the WTO Dispute Settlement Body to retaliate.</li> <li>Canada is now requesting comments on a proposal to impose a surtax on imports of certain products from Australia in the event that it becomes necessary to retaliate.</li> <li>The final retaliation list will be based on the comments received and the level of retaliation authorized by the WTO Dispute Settlement Body. A surtax of 100 percent would be added to the customs duties of selected Australian products.</li> </ul> Department of Finance NOTICE OF INTENTION TO IMPOSE SURTAXES IN RESPONSE TO AUSTRALIA'S FAILURE TO COMPLY WITH THE WTO RULINGS ON SALMON Background The World Trade Organization (WTO) Panel and Appellate Body reports, which were adopted by the WTO Dispute Settlement Body (DSB) on November 6, 1998, found that Australia's ban on imports of fresh, chilled and frozen salmon from Canada violates Australia's WTO obligations. Australia has until July 6, 1999, to comply with the WTO rulings. Canada's objective continues to be access for Canadian salmon. If Australia fails to comply with the WTO rulings by July 6, Australia can negotiate with Canada to provide compensation. If agreement cannot be reached on compensation, Canada has the right to request the DSB to authorize suspension of concessions. Should Canada proceed with a request to the DSB for authorization to retaliate, it is the intention to select products from the list published in this notice on which tariff concessions could be withdrawn. One hundred percent (100%) surtax above existing customs duty would be imposed on products originating from Australia. Invitation to Submit Views Interested parties are invited to submit comments on the items by June 28, 1999. Comments should be submitted in writing to the International Trade Policy Division, Department of Finance, L'Esplanade Laurier, 140 O'Connor street, 14th Floor, East Tower, Ottawa, Ontario, K1A 0G5, Facsimile Number: 613-995-3843. These comments will be taken into consideration in determining the appropriate action to be adopted. Enquiries For further information concerning Australia's ban, contact Ms. Hélène Belleau, Technical Barriers and Regulation Division, Department of Foreign Affairs and International Trade, Lester B. Pearson Building, Tower C, Room C3-144, 125 Sussex Drive, Ottawa, Ontario, K1A 0G2, telephone: 613-944-2100, Facsimile Number: 944-0756. For further information concerning the products included on the list, contact Ms. Marie-France Huot, International Trade Policy Division, Department of Finance, L'Esplanade Laurier, 140 O'Connor Street, 14th Floor, East Tower, Ottawa, Ontario, K1A 0G5, Facsimile Number: 613-995-3843. <table width="100%"> <tr valign="TOP"><td>Tariff Item or Heading </td> <td> Description</td> <td></td> <td>Canadian Tariff Australia or Most-Favoured-Nation<a href="#N_1_">(1)</a> </td></tr> <tr valign="TOP"><td></td> <td></td> <td></td> <td></td></tr> <tr valign="TOP"><td>0204.10.00</td> <td>Carcasses and half-carcasses of lamb, fresh or chilled</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0204.21.00</td> <td>Carcasses and half-carcasses of sheep, fresh, or chilled</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0204.22.10</td> <td>Other cuts of lamb with bone in, fresh or chilled</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0204.22.20</td> <td>Other cuts of mutton with bone in, fresh or chilled</td> <td></td> <td>AUT: Free</td></tr> <tr valign="TOP"><td>0204.23.00</td> <td>Other meat of lamb or mutton, boneless, fresh or chilled</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0204.30.00</td> <td>Carcasses and half-carcasses of lamb, frozen</td> <td></td> <td>AUT: Free</td></tr> <tr valign="TOP"><td>0204.41.00</td> <td>Carcasses and half-carcasses of meat of sheep, frozen</td> <td></td> <td>AUT: Free</td></tr> <tr valign="TOP"><td>0204.42.10</td> <td>Other cuts of lamb, with bone in, frozen</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0204.42.20</td> <td>Other cuts of mutton, with bone in, frozen</td> <td></td> <td>AUT: Free</td></tr> <tr valign="TOP"><td>0204.43.10</td> <td>Other meat of lamb, boneless, frozen</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0204.43.20</td> <td>Other meat of mutton, boneless, frozen</td> <td></td> <td>AUT: Free</td></tr> <tr valign="TOP"><td>0303.77.00</td> <td>Sea bass, (Dicentrarchus labrax, Dicentrarchus punctatus) frozen, excluding livers and roes, and excluding fish fillet and othr fish meat (whether or not minced) fresh, chilled or frozen of Heading No. 03.04</td> <td></td> <td>Free</td></tr></table> <table width="100%"> <tr valign="TOP"><td>0303.79.00</td> <td>Other fish, frozen, classified under heading No.303.79.00 of the Customs Tariff Schedule excluding livers and roes, and excluding fish fillets and other fish meat (whether or not minced), fresh, chilled or frozen of heading 03.04</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0304.20.00</td> <td>Frozen fillets of Pollock, classified under tariff item No. 0304.20.00 of the Customs Tariff Schedule</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0305.59.00</td> <td>Dried fish, whether or not salted but not smoked, except Cod (Gadus morhua, gadus ogac, gaduc macrocephalus)</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0306.11.00</td> <td>Rock lobster and other sea crawfish (Palinurus spp., Panulirus spp., Jasus spp.) frozen and in shell</td> <td></td> <td>5%</td></tr> <tr valign="TOP"><td>0306.13.00</td> <td>Shrimps and prawns, frozen, shelled or in shell</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0307.29.10</td> <td>Scallops, including queen scallops, of the genera Pecten, Chlamys or Placopecten, frozen</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0307.99.00</td> <td>Other molluscs, frozen, including squid and other aquatic invertebrates, fit for human consumption</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0404.10.10</td> <td>Whey protein concentrates</td> <td></td> <td>5.86¢/kg</td></tr> <tr valign="TOP"><td>0406.90.11</td> <td>Cheddar cheese, within access commitment, classified under tariff item 0406.90.11</td> <td></td> <td>AUT: Free</td></tr> <tr valign="TOP"><td>0603.10.90</td> <td>Cut flowers & flower buds, fresh, excluding roses, carnations, chrysanthemums and orchids suitable for bouquets </td> <td></td> <td>AUT: Free</td></tr> <tr valign="TOP"><td>0713.20.00</td> <td>Chickpeas (garbanzos), dried, shelled, whether or not skinned or split</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0713.31.10</td> <td>Beans, of the species Vigna Radiata (L.) Wilczek mung or green gram, in bulk or in packages of weight exceeding 500g dried, whether or not skinned or split.</td> <td></td> <td>Free</td></tr></table> <table width="100%"> <tr valign="TOP"><td>0713.31.90</td> <td>Other beans, of the species Vigna mungo (L.) Hepper or Vigna Radiata (L.) Wilczek mung or green gram, in pack not exceeding 500g dried, whether or not skinned or split</td> <td></td> <td>AUT: Free</td></tr> <tr valign="TOP"><td>0713.40.00</td> <td>Lentils dried, excluding seed</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0802.90.00</td> <td>Nuts, fresh or dried whether or not shelled or peeled, excluding nuts classified in the other tariff items under Heading 08.01 of the Customs Tariff Schedule</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0805.10.00</td> <td>Citrus fruit, Oranges, excluding Temple, fresh</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0805.20.00</td> <td>Mandarins, (excluding tangerines); clementines, wilkings and similar citrus hybrids, fresh or dried</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0806.20.00</td> <td>Grapes, dried</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0808.20.29</td> <td>Pears, fresh, excluding pears for processing</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0810.40.10</td> <td>Blueberries of the genus Vaccinium, cultivated, fresh, in their natural state, excluding wild blueberries</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0810.90.00</td> <td>Other Fruits, fresh, not classified elsewhere</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>0910.10.10</td> <td>Ginger, neither crushed nor ground</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>1006.20.00</td> <td>Rice, husked, (brown), any mixtures of long, medium, short grain</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>1006.30.00</td> <td>Semi-milled or wholly milled rice, whether or not polished or glazed, parboiled, long grain, including mixtures medium, short and mixture rice, broken</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>1006.40.00</td> <td>Rice, broken</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>1008.20.00</td> <td>Millet seed</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>1209.21.00</td> <td>Lucerne (alfalfa) seeds, of a king used for sowing</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>1209.22.00</td> <td>Clover (Trifolium spp.) seed, of a kind for sowing</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>1210.20.00</td> <td>Hop cones, in the form of pellets, excluding lupulin</td> <td></td> <td>Free</td></tr></table> <table width="100%"> <tr valign="TOP"><td>1504.20.90</td> <td>Fats and oils and their fractions, of fish, excluding fish liver oils and their fractions, whether or not refined, but not chemically modified, other than in the rough for use in the manufacture of soaps and oils</td> <td></td> <td>4.5%</td></tr> <tr valign="TOP"><td>1602.50.91</td> <td>Other prepared or preserved meat, of bovine animals, excluding meat offal or blood, not in cans or glass jars and excluding prepared meals</td> <td></td> <td>AUT: Free</td></tr> <tr valign="TOP"><td>1602.50.99</td> <td>Other prepared or preserved meat, of bovine animals, excluding meat offal or blood, not in cans or glass jars and excluding meals</td> <td></td> <td>AUT: Free</td></tr> <tr valign="TOP"><td>1605.90.90</td> <td>Other Molluscs, prepared or preserved, excluding Crustaceans molluscs and other aquatic invertebrates, classified in other tariff items under Heading No. 16.05</td> <td></td> <td>4%</td></tr> <tr valign="TOP"><td>1703.10.90</td> <td>Cane molasses, resulting from the extraction or refining of sugar, excluding powder with admixture other than or anti-caking agents</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>1901.90.20</td> <td>Other food preparations of flour, meal, starch or malt extract, excluding other malt extract, kits in packages of a weight not exceeding 11.34 kg</td> <td></td> <td>5.5%</td></tr> <tr valign="TOP"><td>2006.00.90</td> <td>Vegetables other parts of plants, excluding fruit, fruit peel and nuts, preserved by sugar (drained, glacé or crystallized)</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>2008.40.90</td> <td>Pears, other than pulp or chips, whether or not in air-tight containers, otherwise prepared or preserved</td> <td></td> <td>10%</td></tr> <tr valign="TOP"><td>2008.92.10</td> <td>Fruit mixtures, consisting of akalas, akees, anchovy pears, and other</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>2008.92.90</td> <td>Other fruit mixtures, prepared or preserved, nes</td> <td></td> <td>7%</td></tr></table> <table width="100%"> <tr valign="TOP"><td>2008.99.30</td> <td>Akalas, akees, anchovy pears, and other productc mentioned in tariff item except mixtures</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>2008.99.90</td> <td>Other fruits (except pulp) and edible parts of plants, otherwise</td> <td></td> <td>7%</td></tr> <tr valign="TOP"><td>2009.60.10</td> <td>Grape juice, for wine-making, concentrated, except for use in the manufacture of fruit juices or beverages</td> <td></td> <td>Free</td></tr> <tr valign="TOP"><td>2009.70.10</td> <td>Apple juice, nes, concentrated, not frozen, for use in the manufacture of apple juice</td> <td></td> <td>9.63¢/litre but not less than 8.5%</td></tr> <tr valign="TOP"><td>3304.99.90</td> <td>Other preparations for the care of the skin (other than medicaments), sunscreen or sun tan preparations, excluding beauty or make-up preparations and manicure or pedicure preparations and other powders, whether or not compressed. </td> <td></td> <td>9%</td></tr> <tr valign="TOP"><td>4104.31.00</td> <td>Other bovine leather and equine leather, parchment-dressed or prepared after tanning, other than those of heading 41.04; full grains and full grain splits</td> <td></td> <td>Free or AUT:3%</td></tr> <tr valign="TOP"><td>4302.19.00</td> <td>Tanned or dressed whole furskins (with or without heads, tails or paws), not assembled, other than of mink, certain lamb, rabbit or hare, and other than those of heading No.43.03 </td> <td></td> <td>Free, AUT:3.5%, AUT:3% or 3% </td></tr> <tr valign="TOP"><td>5703.10.10</td> <td>Carpets and other textile floor covering, machine tufted, whether or not made up of wool or fine animal hair</td> <td></td> <td>AUT: 14%</td></tr> <tr valign="TOP"><td>6201.12.00</td> <td>Men's and boys' overcoats, car-coats, capes, cloaks, and similar articles of cotton</td> <td></td> <td>19.5%</td></tr> <tr valign="TOP"><td>6302.60.00</td> <td>Toilet linen and kitchen linen, of terry towelling or similar terry fabrics, of cotton</td> <td></td> <td>19.5%</td></tr> <tr valign="TOP"><td>6403.51.00</td> <td>Other footwear with outer soles of leather, covering the ankle and uppers of leather other than, sports footwear and outer soles of leather, and uppers which consist of leather straps across the instep and around the big toe</td> <td></td> <td>AUT: 13.5%</td></tr></table> <a name="N_1_">1. </a> MFN tariff rates or Australia Tariff rates (AUT) are those applicable to imports from Australia. May 17, 1999 </body> </html>

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