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<title>CANADA RECEIVES WTO ARBITRATION REPORT</title>
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<p><font face="Arial"></font><font face="Arial" size="+1"></font><font face="Arial" size="+1">July 12, 1999 <em>(4:45 p.m. EDT)</em> No. 158</font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong></strong></font><font face="Arial" size="+1"><strong>CANADA RECEIVES WTO ARBITRATION REPORT</strong></font><font face="Arial"></font></p>
<p><font face="Arial" size="+1"></font><font face="Arial">International Trade Minister Sergio Marchi and Agriculture and Agri-Food Minister Lyle Vanclief today received a
World Trade Organization (WTO) arbitration report setting $11.3 million as the value of trade damage suffered by
Canada because of a continued European Union (EU) beef ban. The WTO Arbitrator's decision is final and cannot
be appealed.</font></p>
<p><font face="Arial">"The report vindicates Canada's position that the EU ban is arbitrary and unjustified. Although we received less
than we asked for, we received more than the EU argued we were owed," said Minister Marchi. "Obviously, we
wish the award had been higher." The Minister said all lines of communication with the EU would be open to
achieve compensation for the loss, but if that was not quickly forthcoming Canada would move to retaliation.</font></p>
<p><font face="Arial">"We are disappointed that a higher value of impairment was not put forward by the Arbitrator," added Minister
Vanclief. "But we will continue to press the EU to open its market to high-quality Canadian beef."</font></p>
<p><font face="Arial">Canada has consistently opposed the EU ban on Canadian beef since it began in 1989. In 1997, a WTO panel
made it clear the EU ban on beef produced with growth hormones is not based on scientific evidence and therefore
is inconsistent with the EU's WTO obligations. This finding was confirmed by the WTO Appellate Body in 1998, and
a WTO arbitrator gave the EU until May 13, 1999, to comply with the rulings. On April 17, 1999, Canada announced
a 30-day comment period on a proposed list of products that might be subject to tariff increases in the event that
the EU did not comply. On May 13, the EU indicated that it would not lift its ban.</font></p>
<p><font face="Arial">On June 3, 1999, Canada had requested authority from the WTO Dispute Settlement Body (DSB) to retaliate
against the EU in response to the EU's failure to comply with the WTO rulings against its ban on imports of
Canadian beef. At the same meeting, the EU requested arbitration on the amount of retaliation Canada was
seeking, which precluded the DSB from granting Canada the authorization to retaliate. Canada must now resubmit
its request to the DSB for authority to retaliate and intends to do so at the next meeting on July 26.</font></p>
<p><font face="Arial">Canada's decision on the final list of products that may be subject to retaliation will reflect the comments received
and the value of retaliation authorized by the DSB. The Government will make an announcement by the end of July
on the final list.</font></p>
<p align="CENTER"><font face="Arial">- 30 -</font></p>
<p><font face="Arial">Background information on this issue is available at:</font></p>
<p><font face="Arial">http://www.dfait-maeci.gc.ca/tna-nac</font></p>
<p><font face="Arial">For further information, media representatives may contact:</font></p>
<p><font face="Arial">Leslie Swartman</font></p>
<p><font face="Arial">Office of the Minister for International Trade</font></p>
<p><font face="Arial">(613) 992-7332</font></p>
<p><font face="Arial">Sylvie Millette LeDuc</font></p>
<p><font face="Arial">Office of the Minister of Agriculture and Agri-Food</font></p>
<p><font face="Arial">(613) 759-1761</font></p>
<p><font face="Arial">Media Relations Office</font></p>
<p><font face="Arial">Department of Foreign Affairs and International Trade</font></p>
<p><font face="Arial">(613) 995-1874</font></p>
<p><font face="Arial">This document is also available on the Department of Foreign Affairs and International Trade Internet site:</font></p>
<p><font face="Arial">http://www.dfait-maeci.gc.ca</font></p>
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