September 24, 1998 No. 220

CANADA REQUESTS CONSULTATIONS ON SOUTH DAKOTA BLOCKADE

International Trade Minister Sergio Marchi today announced that Canada has requested consultations under the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) Agreement on the South Dakota blockade and other states' measures concerning Canadian trucks carrying cattle, swine and grain.

"The treatment Canadians are receiving at the state border is unfair, unacceptable and violates the United States' obligations under NAFTA and the WTO agreement," said Mr. Marchi. "Our call for consultations under both trade agreements is a first step, and underscores the importance of this issue to Canada and our concern over the U.S. government's inaction to date."

In addition to violating a number of the United States' obligations under NAFTA and the WTO, the South Dakota governor's actions are based on false assertions regarding the health and safety of Canadian cattle, hogs and grain shipped to the United States.

"This is a critical concern to Canada's agriculture industry," said Agriculture and Agri-Food Minister Lyle Vanclief. "It is imperative that this situation be resolved before the dispute escalates and irreparable damage is done to farmers and our agricultural trade with the United States," said Minister Vanclief.

Canada is proud of the quality of cattle, hogs and grain it exports to the United States and Canada's shipments meet all U.S. federal government requirements.

"Canada plays by international trade rules, and so should our trading partners," said Ralph Goodale, the Minister responsible for the Canadian Wheat Board.

High-level discussions are ongoing between Ministers on both sides of the border. Canada is continuing to consult with provinces and stakeholders in order arrive at a resolution that is satisfactory to all parties. This is the first time that Canada has sought consultations on a trade dispute simultaneously under both the NAFTA and WTO trade bodies.

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Background material on NAFTA and WTO consultation processes is attached.

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

Sylvie Millette LeDuc, Press Secretary

Office of the Minister of Agriculture and Agri-food

(613) 759-1761

This document is also available on the Department's Internet site: http://www.dfait-maeci.gc.ca

Backgrounder

FLOW CHART OF OF NAFTA TRADE DISPUTE

Parties may request consultations on any actual or proposed measure or any matter that they think may affect the operation of the NAFTA. Consultations on matters regarding perishable agricultural goods must commence within 15 days of the delivery of the request. If the parties fail to resolve the dispute within 30 days (15 for perishable agricultural goods) any party may request a meeting of the NAFTA Commission and within 30 days of that meeting request that an arbitral panel be formed.

Ideal Timeline for NAFTA Chapter 20 Arbitral Panel as per the Rules of Procedures

(Two Disputing Parties)

Note: This timeline assumes an ideal case.

Backgrounder

FLOW CHART OF WTO TRADE DISPUTE

The purpose of this indicative flow chart is twofold. First, to highlight the main steps in the evolution of a trade dispute based on standard proceedings under the WTO Dispute Settlement Understanding and, secondly, to provide a synoptical view of DSU time frames.

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Request for Consultations

If responding party does not reply within 10 days, or if it does

not enter into consultations within 30 days, or at period

mutually agreed, the complaining party can request the

establishment of a panel

Consultations

60 days

Complaining State may request panel

The complaining State may request a panel at any

time after 60 days from the date the request is received by the

other State, provided consultations have not resolved

the issue

Dispute Settlement Body (DSB) establishes panel

(usually within 10-30 days)

Panel's terms of reference

Composition of the panel

(within 20 days of the establishment of the panel)

Panel Examination

As a general rule, should not exceed 6 months from composition

of the panel

(includes circulation of interim report within 13 to 22 weeks)

Final panel report circulated to Members and DSB

(report circulated to disputing parties a few weeks in advance)

DSB monitors implementation of adopted

panel/Appellate Body recommendations

within 30 days of adoption the responding party must inform the

DSB of its intentions regarding the implementation of the

recommendations