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WTO APPELLATE RULING GOOD NEWS FOR CANADIAN DAIRY INDUSTRY

OTTAWA, December 3, 2001 - Canadian dairy producers, processors and exporters celebrated a significant decision of the World Trade Organization (WTO) Appellate Body to overturn an earlier panel ruling that said Canada's commercial export milk approach constitutes an export subsidy.

The Appellate Body found the U.S. and New Zealand failed to prove that Canada's approach to commercial export milk is WTO inconsistent.

"This decision validates what we have been saying all along. We are satisfied that our industry can turn its attention to what it does best: creating the best dairy products in the world," said Agriculture and Agri-Food Canada Minister Lyle Vanclief.

"We are extremely pleased with today's decision," said International Trade Minister Pierre Pettigrew. "In close cooperation with the provinces and industry, Canada put forward a strong case which successfully promoted the interests of our industry."

After an earlier loss at the WTO in 1999, the federal government and the dairy industry worked together to make major changes to the way milk destined for exported dairy products is marketed. Not satisfied with these changes, the United States and New Zealand requested the WTO compliance panel which ruled that Canada's commercial export milk approach constituted an export subsidy.

Canada's appeal of that decision was launched in September of this year. With the final ruling today, the arbitration process requested by the U.S. and New Zealand to determine the amount of retaliation they could have imposed on Canada, will not take place.

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To view background information on today's ruling with a chronology of events leading to the decision as well as information related to Canada's dairy industry, please go to www.agr.gc.ca

For more information, media may contact:

Donald Boulanger
Press Secretary
Minister Vanclief's Office
Ottawa
(613) 759-1761
Sébastien Théberge
Press Secretary
Office of the Minister for International Trade
Ottawa
(613) 992-7332
Media Relations
Agriculture and Agri-Food Canada
(613) 759-7972
Ottawa
Media Relations Office
Department of Foreign Affairs and
International Trade
(613) 995-1874

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