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<title> CANADA WELCOMES BRAZIL'S OFFER TO NEGOTIATE COMPLIANCE WITH WTO RULING ON PROEX</title>
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<p><font face="Arial"></font><font face="Arial" size="+1"></font><font face="Arial" size="+1"><strong>May 12, 2000 <em></em> No. 103</strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"> </font><font face="Arial" size="+1"><strong>CANADA WELCOMES BRAZIL'S OFFER TO NEGOTIATE </strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>COMPLIANCE WITH WTO RULING ON PROEX</strong></font><font face="Arial"></font></p>
<p><font face="Arial" size="+1"></font><font face="Arial">International Trade Minister Pierre Pettigrew welcomed Brazil's offer to negotiate implementation of the recent
World Trade Organization (WTO) ruling on Brazil's Proex program. Discussions are expected to take place
within the next 10 days.</font></p>
<p><font face="Arial">"Canada has always been interested in negotiating a satisfactory agreement with Brazil, and we welcome the
Brazilian initiative," said Mr. Pettigrew. "We are encouraged by Brazilian Foreign Minister Luiz Felipe
Lampreia's recent statement that Brazil is prepared to implement the WTO ruling with respect to future
contracts. We will want to review the details of implementation for future contracts, in addition to discussing the
treatment of undelivered aircraft, and are hopeful that these discussions will set the basis for resolving this
dispute."</font></p>
<p><font face="Arial">Earlier this week, Canada acted to protect its WTO rights in its dispute with Brazil over the withdrawal of
prohibited Proex export subsidies by seeking WTO authority to retaliate against Brazil. </font></p>
<p><font face="Arial">On May 9, a WTO panel ruled that Brazil's Proex program continued to be an illegal export subsidy. This ruling
followed an August 1999 WTO appellate body decision, which stated that Brazil must withdraw its Proex
program.</font></p>
<p align="CENTER"><font face="Arial">- 30 -</font></p>
<p><font face="Arial">For further information, media representatives may contact:</font></p>
<p><font face="Arial">Sylvie Bussières</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">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>
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