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<title>CANADA TAKES ACTION TO SUPPORT THE CANADIAN BEEF INDUSTRY </title>
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<p><font face="Arial"></font><font face="Arial" size="+1"></font><font face="Arial" size="+1"></font><font face="Arial" size="+1"><strong>June 4, 2003 <em>(11:20 a.m. EDT)</em> No. 78</strong></font></p>
<p align="CENTER"><font size="+1"><strong>CANADA TAKES ACTION TO SUPPORT THE CANADIAN BEEF INDUSTRY </strong></font><font face="Arial"></font></p>
<p>The Government of Canada, in support of the Canadian beef industry, today announced that it has taken measures to work
with and support an industry facing the challenges and uncertainty brought on by the single case of bovine spongiform
encephalopathy (BSE).</p>
<p>Canadian companies wishing to apply for supplementary imports of non-NAFTA beef and veal will be required to first
offer the opportunity to supply their needs to at least five Canadian suppliers. The current policy requires companies to
check with only two domestic suppliers.</p>
<p>Supplementary imports will normally not be allowed if a Canadian supplier is able to meet the applicant's needs at prices
that are competitive with prices of similar products imported into the United States.</p>
<p>The new requirements will be in effect for all requests for supplementary imports received after May 20, 2003.</p>
<p>"These adjustments reflect the government's commitment to supporting the Canadian industry in facing the challenges and
uncertainty brought on by the recent discovery of BSE in one cow in Alberta," said International Trade Minister Pierre
Pettigrew. "We have consulted closely with stakeholders in making these changes to our supplementary import policy, and
there is widespread support."</p>
<p>"Our top priority remains resolving the BSE situation and restoring our export market access," said Agriculture and Agri-Food Minister Lyle Vanclief. "We will continue to work with the provinces and industry stakeholders to achieve this goal
and return our industry to business as usual, as quickly as possible." </p>
<p>The supplementary import policy has been adjusted to ensure that Canadian beef suppliers have every opportunity to supply
customers at competitive North American prices. It balances the need of Canadian firms to sell beef with the need of
Canadian value-added processors to have access to the beef required to meet their customers' demands.</p>
<p>Companies will still be able to apply for supplementary imports, but they will need to justify their non-acceptance of offers
made by Canadian suppliers at competitive prices before their requests will be considered.</p>
<p>These changes are consistent with the government's overall tariff rate quota policy. They reflect the integrated nature of the
North American market, the importance of the U.S. market for Canadian industry and the benefits of access to offshore
supplies and markets. The changes to the supplementary import policy have been developed in close consultation and
cooperation with industry stakeholders, based on a partnership approach to meeting the challenges facing the industry. </p>
<p>The Notice to Importers covering the supplementary import permit system has been modified to reflect the amendments and
is available on the Department of Foreign Affairs and International Trade's Internet site at <a href="https://bac-lac.wayback.archive-it.org/web/20070220192719/http://www.dfait-maeci.gc.ca/~eicb">http://www.dfait-maeci.gc.ca/~eicb</a></p>
<p align="CENTER">- 30 -</p>
<p>A backgrounder is attached.</p>
<p>For further information, media representatives may contact:</p>
<p>Sébastien Théberge</p>
<p>Director of Communications</p>
<p>Office of the Minister for International Trade</p>
<p>(613) 992-7332</p>
<p><a href="https://bac-lac.wayback.archive-it.org/web/20070220192719/mailto:sebastien.theberge@dfait-maeci.gc.ca">sebastien.theberge@dfait-maeci.gc.ca</a></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 Office</p>
<p>Agriculture and Agri-Food Canada</p>
<p>(613) 759-7972</p>
<p><font face="Times New Roman"></font>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/20070220192719/http://www.dfait-maeci.gc.ca/">http://www.dfait-maeci.gc.ca</a></p>
<p align="CENTER"><font face="Times New Roman"></font><font size="+1"><strong>Backgrounder</strong></font></p>
<p align="CENTER"><font size="+1"><strong>CANADA'S BEEF AND VEAL TRQ</strong></font></p>
<p><strong>Tariff Rate Quota</strong></p>
<p>Canada has a tariff rate quota (TRQ) of 76,409 tonnes for non-NAFTA fresh chilled and frozen beef and veal, as negotiated
in the World Trade Organization. Duties do not have to be paid on imports entering Canada within this TRQ quantity.
Imports above this level normally pay a duty of 26.5 percent. The Minister, however, may authorize supplementary duty-free imports of non-NAFTA beef over the TRQ level.</p>
<p>Imports from the U.S. and Mexico, as well as from Chile, are not subject to the TRQ, and hence there are no quantitative
limitations on duty-free imports from these three countries. </p>
<p>Within the above TRQ level, there are two country reserves: 29,600 tonnes from New Zealand and 35,000 tonnes from
Australia. The remaining amount of 11,809 tonnes is open to imports from other countries certified by the Canadian Food
Inspection Agency, and to Australia and New Zealand once they have filled their reserves.</p>
<p>Canada's TRQ policy reflects the integrated nature of the North American market, the importance of the U.S. market for
Canadian industry, and the benefits of access to offshore supplies and markets.</p>
<p>The administration of the TRQ, including the current supplementary import policy and its modifications (see below),
reflects the advice and recommendation of the Beef and Veal Tariff Rate Quota Advisory Committee, which is the
Minister's advisory committee on the beef and veal TRQ and includes representatives of the key stakeholders.</p>
<p><strong>Current Supplementary Import Policy</strong></p>
<p>Within the above overall policy, the supplementary import policy is designed to provide Canadian value-added processors
with access to offshore beef of similar quality and price as beef available to U.S. processors while guarding against imports
of non-NAFTA beef at discounted prices.</p>
<p>Before the policy changed, the main conditions for receiving a supplementary import authorization were:</p>
<p>• the quota holder had utilized at least 80 percent of its TRQ allocation;</p>
<p>• the price of the imported beef was not less than the comparable import price in the U.S.; </p>
<p>• the U.S. beef TRQ had not been filled; and</p>
<p>• the applicant had checked with two domestic suppliers who had registered with the Department of Foreign Affairs and
International Trade to give them an opportunity to fill the order.<font face="CG Times Regular"></font></p>
<p><strong>What Is New</strong></p>
<p>Firms wishing to apply for supplementary imports of non-NAFTA beef and veal will now be required to first offer the
opportunity to supply their needs to at least five Canadian suppliers. The current policy requires companies to check with
only two domestic suppliers.</p>
<p>Supplementary imports of non-NAFTA beef will normally not be allowed if a Canadian supplier is able to meet the
applicant's needs at prices that are competitive with prices of similar products imported into the United States.</p>
<p>Companies will still be able to apply for supplementary imports, but they will need to provide reasons and justification for
why they have not accepted offers made by Canadian suppliers at competitive prices before their requests will be
considered.</p>
<p>Supplementary imports will normally be allowed if similar products are not available in Canada at competitive prices.</p>
<p>The other existing policy conditions remain unchanged, including the condition that supplementary imports will not
normally be permitted if the price of offshore beef entering Canada is less than the price of similar goods entering the
United States. </p>
<p>The policy changes apply to any request for supplementary beef and veal imports that was received on or after May 21.
Companies that applied on or after May 21 will have an opportunity to resubmit their requests for assessment under the new
policy.</p>
<p>The policy changes have been developed in close consultation and cooperation with industry stakeholders, based on a
partnership approach to meeting the challenges facing the industry. The policy changes reflect the advice and
recommendations of the Tariff Rate Quota Advisory Committee. </p>
<p>The changes are designed to provide Canadian beef suppliers with every opportunity to supply customers at competitive
North American prices, while balancing the need of Canadian value-added processors to have access to beef products at
competitive prices.</p>
<p>Importers will also still be allowed to import non-NAFTA beef by paying the 26.5 percent tariff.</p>
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