October 7, 1998 No. 236

CANADA ASKS WTO TO ESTABLISH DISPUTE SETTLEMENT PANEL TO RESOLVE DISPUTE WITH FRANCE ON CHRYSOTILE ASBESTOS

International Trade Minister Sergio Marchi and Natural Resources Minister Ralph Goodale today announced that Canada will ask the World Trade Organization (WTO) to establish a dispute settlement panel for the resolution of the dispute with France on the issue of chrysotile asbestos.

Canada's request for a panel will be on the agenda at the October 21 meeting of the WTO dispute settlement body. Canada will ask the panel to examine whether the French ban on chrysotile asbestos is consistent with France's international obligations. This decision was taken after a series of discussions with the Canadian government's partners in this issue.

"Last May, we formally requested and obtained consultations, the first step in the WTO dispute settlement process," said Mr. Marchi. "Unfortunately, this process did not enable Canada and France to find a mutually satisfactory resolution to this issue, and we believe that it is time to have the WTO rule on this dispute, which we have been attempting to resolve for the past two years."

"The Canadian government's objective is to maintain market access for chrysotile asbestos products, which can be used safely when the safe-use principle of the government's minerals and metals policy is respected," said Mr. Goodale.

Since January 1, 1997, France has prohibited the manufacture, import and sale of asbestos and products containing asbestos, with rare exceptions.

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Two backgrounders are 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

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

(7:30 p.m. EDT)

Backgrounder

CHRONOLOGY OF DEVELOPMENTS IN THE ASBESTOS ISSUE

• In July 1996, the French government announced its intention to ban the importation and manufacture of asbestos as of January 1, 1997, based on a report by the Institut national sur la santé et la recherche médicale (INSERM).

• Health Canada, via the Royal Society of Canada, began a scientific independent review of the INSERM report, which was completed in early December 1996.

• On November 15, 1996, International Trade Minister Art Eggleton and Treasury Board President Marcel Massé met in Thetford Mines with community leaders and asbestos industry stakeholders.

• On November 18, 1996, French Prime Minister Juppé responded to Prime Minister Chrétien's letter on exemptions to the ban.

• On December 11, 1996, during a bilateral meeting in Singapore, International Trade Minister Eggleton discussed the asbestos ban at the European Union level with Sir Leon Brittan.

• On December 12, 1996, Prime Minister Chrétien sent a follow-up letter to French Prime Minister Alain Juppé.

• On January 1, 1997, the French ban was imposed.

• From January 9 to 13, 1997, International Trade Minister Eggleton raised his concerns about Korean market access asbestos issues with his counterpart during the Team Canada trip.

• On January 15, 1997, the Royal Society of Canada released its study on the French INSERM report. The report confirmed that France had overestimated the real threat of asbestos to the French population.

• On January 22 and 23, 1997, Prime Minister Chrétien again raised the asbestos issue with his French counterpart, Alain Juppé.

• On February 14, 1997, Canadian officials raised the French ban issue at a meeting of the Technical Barriers to Trade Committee of the World Trade Organization (WTO). The European Union undertook to report back to the Committee justifying the ban.

• On March 3, 1997, Natural Resources Minister McLellan and Treasury Board President Massé held a press conference in Thetford Mines after the signing of a memorandum of understanding between the federal government and the two Canadian asbestos producers on the responsible use of asbestos.

• March 15 to 20, 1997, three French journalists visited the Canadian asbestos industry on a fact-finding tour at the invitation of the Department of Foreign Affairs and International Trade (DFAIT), in co-operation with Natural Resources Canada (NRCan).

• In June 1997, Canada again raised the French ban on asbestos issue in the WTO Technical Barriers to Trade Committee.

• On June 18, 1997, the U.K. Environment Minister Angela Eagle announced her government's intention to ban the use and importation of chrysotile asbestos products.

• On June 20, 1997, Prime Minister Chrétien met with U.K. Prime Minister Tony Blair at the Denver Summit to raise Canadian concerns about the United Kingdom's intentions to move toward banning the use of chrysotile asbestos.

• In July 1997, International Trade Minister Marchi wrote to domestic stakeholders to initiate consultations on WTO action on asbestos against France.

• On September 11, 1997, consultations on WTO action were held with stakeholders.

• September 14 to 16, 1997, NRCan sponsored a scientific workshop in Montréal on the health risks associated with the use of chrysotile and present-day chrysotile-based products.

• September 16 to 19, 1997, NRCan organized and co-sponsored an International Conference in Montréal on the safe and responsible use of chrysotile fibres. About 300 delegates from 45 countries were present at this event.

• On September 17, 1997, the Canadian government announced it would support a $0.25-million training program to help implement the responsible-use policy for chrysotile asbestos in developing countries.

• On September 30, 1997, a Canadian delegation of asbestos experts met with officials from the U.K. Health and Safety Executive to exchange scientific information about the health risks associated with the use of chrysotile asbestos and to outline concerns regarding the use of substitutes.

• In late September 1997, the asbestos issue was raised by the French government with the Premier of Quebec in Paris.

• In October 1997, discussions were held between French and Canadian officials on possible steps to alleviate Canadian concerns over asbestos, including the initiation of the "Kouchner process."

• On October 22, 1997, Prime Minister Chrétien met U.K. Prime Minister Blair at the Commonwealth Heads of Government meeting in London, and suggested that further scientific discussions be held between the United Kingdom and Canada.

• On November 26, 1997, the Deputy Minister for International Trade met with stakeholders in Montréal to discuss WTO action on asbestos.

• December 18, 1997, a joint Canada/Quebec meeting was organized with government and industry representatives from six chrysotile-producing countries (Brazil, Canada, Russia, South Africa, Swaziland and Zimbabwe) to discuss joint actions in defence of chrysotile asbestos.

• On January 21, 1998, Prime Minister Chrétien wrote to Prime Minister Blair to assure him of Canada's intention to participate in the consultation process.

• In February 1998, the United Kingdom announced it would be pursuing consultations on workers' safety with respect to chrysotile as opposed to announcing its intentions to ban the use of asbestos.

• In January/February 1998, there were further consultations with stakeholders on WTO asbestos action.

• In February 1998, the European Union issued a directive which, for all intents and purposes, bans asbestos in brakes.

• On February 27, 1998, a diplomatic note was sent to Belgian authorities asking for justification of the February 3, 1998, decision to ban asbestos. This was followed by a meeting between Ambassador Jean-Paul Hubert and the Belgian Minister of State to raise concerns about the Belgian ban decision.

• In March 1998, Canada along with other chrysotile-producing countries signed an aide-mémoire on the responsible use of asbestos. This aide-mémoire was submitted by the participating Ambassadors to the European Union.

• In March, April and May 1998, DFAIT with the co-operation of NRCan organized visits of the Canadian asbestos industry by Belgian, U.K. and Moroccan journalists. The purpose of these visits was to brief foreign journalists on the government's position on the safe use of chrysotile asbestos and to demonstrate the modern chrysotile asbestos industry.

• In April 1998, International Trade Minister Marchi met with his French counterpart, Minister Dondoux, and raised the asbestos issue.

• On April 21, 1998, Deputy Minister for International Trade, Rob Wright, met with U.K. Environment Minister Angela Eagle to discuss the asbestos file.

• On April 22, 1998, the Council of Europe adopted a report that called for a European ban of asbestos.

• In April 1998, French Professor Claude Got visited Canada, followed by France's Secretary of State Bernard Kouchner.

• In May 1998, Canadian concerns over asbestos were raised on various occasions at the political level in Europe.

• On May 14, 1998, Prime Minister Chrétien raised the issue of asbestos with his counterparts during the Canada/European Union Summit.

• On May 28, 1998, International Trade Minister Marchi instructed the Canadian mission in Geneva to formally request consultations, under the dispute settlement procedures of the WTO, on the measures taken by France to ban chrysotile asbestos.

• On July 8, 1998, Canada and France held formal consultations under the WTO dispute settlement process, but no resolution of the dispute was achieved.

• On July 29, 1998, France released Professor Claude Got's report, whose findings did not change the French government's decision to impose its ban on chrysotile asbestos.

• On August 18, 1998, International Trade Minister Marchi and Natural Resources Minister Goodale urged British authorities to weigh objectively the evidence favouring safe use of chrysotile asbestos in industrial products. The British government initiated public consultations following a health department report comparing the health risks of asbestos with substitute materials.

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 (other WTO Members with substantial

trade interest have 10 days to join the consultations)

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