GOVERNMENT SEEKS INPUT ON POSSIBLE RETALIATION AGAINST AUSTRALIA
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
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.
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.
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.
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.
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.
For more than two decades, Canada has made sincere efforts to resolve this dispute with Australia but has
been unsuccessful.
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.
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.
The draft IRA encountered strong domestic opposition in Australia, mainly from the Tasmanian salmon
cultivators and some sport fishing groups.
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.
In November 1995, Canada held WTO consultations with Australia in a further attempt to resolve the issue.
These consultations were unsuccessful.
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.
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.
Canada reviewed the December 1996 IRA and concluded that Australia had not presented any new evidence
to support the ban.
On April 10, 1997, a World Trade Organization (WTO) Dispute Settlement Panel was established to hear
Canada's complaint.
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).
Australia appealed the Panel's findings on July 22, 1998.
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.
On November 6, 1998, the WTO Dispute Settlement Body adopted the WTO Panel and Appellate Body
reports.
On February 22, 1999, a WTO arbitrator gave Australia until July 6, 1999, to implement the WTO rulings.
To comply with the WTO rulings, Australia must remove its ban by July 6, 1999.
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.
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.
Under WTO rules, Canada will have 30 days from July 6 to request authorization from the WTO Dispute
Settlement Body to retaliate.
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.
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.
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.
Carcasses and half-carcasses of lamb, fresh or
chilled
Free
0204.21.00
Carcasses and half-carcasses of sheep, fresh,
or chilled
Free
0204.22.10
Other cuts of lamb with
bone in, fresh or chilled
Free
0204.22.20
Other cuts of mutton with
bone in, fresh or chilled
AUT: Free
0204.23.00
Other meat of lamb or
mutton, boneless, fresh or
chilled
Free
0204.30.00
Carcasses and half-carcasses of lamb, frozen
AUT: Free
0204.41.00
Carcasses and half-carcasses of meat of sheep,
frozen
AUT: Free
0204.42.10
Other cuts of lamb, with
bone in, frozen
Free
0204.42.20
Other cuts of mutton, with
bone in, frozen
AUT: Free
0204.43.10
Other meat of lamb,
boneless, frozen
Free
0204.43.20
Other meat of mutton,
boneless, frozen
AUT: Free
0303.77.00
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
Free
0303.79.00
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
Free
0304.20.00
Frozen fillets of Pollock,
classified under tariff item
No. 0304.20.00 of the
Customs Tariff Schedule
Free
0305.59.00
Dried fish, whether or not
salted but not smoked,
except Cod (Gadus
morhua, gadus ogac, gaduc
macrocephalus)
Free
0306.11.00
Rock lobster and other sea
crawfish (Palinurus spp.,
Panulirus spp., Jasus spp.)
frozen and in shell
5%
0306.13.00
Shrimps and prawns,
frozen, shelled or in shell
Free
0307.29.10
Scallops, including queen
scallops, of the genera
Pecten, Chlamys or
Placopecten, frozen
Free
0307.99.00
Other molluscs, frozen,
including squid and other
aquatic invertebrates, fit for
human consumption
Free
0404.10.10
Whey protein concentrates
5.86¢/kg
0406.90.11
Cheddar cheese, within
access commitment,
classified under tariff item
0406.90.11
AUT: Free
0603.10.90
Cut flowers & flower buds,
fresh, excluding roses,
carnations,
chrysanthemums and
orchids suitable for
bouquets
AUT: Free
0713.20.00
Chickpeas (garbanzos),
dried, shelled, whether or
not skinned or split
Free
0713.31.10
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.
Free
0713.31.90
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
AUT: Free
0713.40.00
Lentils dried, excluding
seed
Free
0802.90.00
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
Free
0805.10.00
Citrus fruit, Oranges,
excluding Temple, fresh
Free
0805.20.00
Mandarins, (excluding
tangerines); clementines,
wilkings and similar citrus
hybrids, fresh or dried
Free
0806.20.00
Grapes, dried
Free
0808.20.29
Pears, fresh, excluding
pears for processing
Free
0810.40.10
Blueberries of the genus
Vaccinium, cultivated,
fresh, in their natural state,
excluding wild blueberries
Free
0810.90.00
Other Fruits, fresh, not
classified elsewhere
Free
0910.10.10
Ginger, neither crushed nor
ground
Free
1006.20.00
Rice, husked, (brown), any
mixtures of long, medium,
short grain
Free
1006.30.00
Semi-milled or wholly
milled rice, whether or not
polished or glazed,
parboiled, long grain,
including mixtures medium,
short and mixture rice,
broken
Free
1006.40.00
Rice, broken
Free
1008.20.00
Millet seed
Free
1209.21.00
Lucerne (alfalfa) seeds, of a
king used for sowing
Free
1209.22.00
Clover (Trifolium spp.)
seed, of a kind for sowing
Free
1210.20.00
Hop cones, in the form of
pellets, excluding lupulin
Free
1504.20.90
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
4.5%
1602.50.91
Other prepared or
preserved meat, of bovine
animals, excluding meat
offal or blood, not in cans
or glass jars and excluding
prepared meals
AUT: Free
1602.50.99
Other prepared or
preserved meat, of bovine
animals, excluding meat
offal or blood, not in cans
or glass jars and excluding
meals
AUT: Free
1605.90.90
Other Molluscs, prepared
or preserved, excluding
Crustaceans molluscs and
other aquatic invertebrates,
classified in other tariff
items under Heading No.
16.05
4%
1703.10.90
Cane molasses, resulting
from the extraction or
refining of sugar, excluding
powder with admixture
other than or anti-caking
agents
Free
1901.90.20
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
5.5%
2006.00.90
Vegetables other parts of
plants, excluding fruit, fruit
peel and nuts, preserved by
sugar (drained, glacé or
crystallized)
Free
2008.40.90
Pears, other than pulp or
chips, whether or not in air-tight containers, otherwise
prepared or preserved
10%
2008.92.10
Fruit mixtures, consisting of
akalas, akees, anchovy
pears, and other
Free
2008.92.90
Other fruit mixtures,
prepared or preserved, nes
7%
2008.99.30
Akalas, akees, anchovy
pears, and other productc
mentioned in tariff item
except mixtures
Free
2008.99.90
Other fruits (except pulp)
and edible parts of plants,
otherwise
7%
2009.60.10
Grape juice, for wine-making, concentrated,
except for use in the
manufacture of fruit juices
or beverages
Free
2009.70.10
Apple juice, nes,
concentrated, not
frozen, for use in the
manufacture of apple
juice
9.63¢/litre but not less than
8.5%
3304.99.90
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.
9%
4104.31.00
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
Free or AUT:3%
4302.19.00
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
Free, AUT:3.5%,
AUT:3% or 3%
5703.10.10
Carpets and other textile
floor covering, machine
tufted, whether or not made
up of wool or fine animal
hair
AUT: 14%
6201.12.00
Men's and boys'
overcoats, car-coats,
capes, cloaks, and similar
articles of cotton
19.5%
6302.60.00
Toilet linen and kitchen
linen, of terry towelling or
similar terry fabrics, of
cotton
19.5%
6403.51.00
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