May 31, 2005 (10:00 a.m. EDT)
No. 99

CANADA SEEKS PUBLIC VIEWS ON POSSIBLE INCREASE IN CERTAIN MOST-FAVOURED-NATION TARIFFS

International Trade Minister Jim Peterson today announced that the Government of Canada is seeking public comments on a list of products that could be subject to higher customs duties, in response to increases in certain European Union (EU) tariffs.

After 10 additional countries became members of the EU in May 2004, tariffs from these countries were harmonized to the EU tariff rate. In some cases, this harmonization resulted in higher tariffs for Canadian exports. Under WTO rules, Canada is entitled to seek compensation for these additional costs. Consultations are taking place to ensure that Canada has all options at its disposal should Canada and the EU fail to reach agreement on compensation for these economic losses.

“While we are confident that current negotiations with the EU will respond to Canada’s concerns, we have to ensure that we keep all of our options open,” said Minister. Peterson.

According to WTO rules, a decision to increase the most-favoured-nation (MFN) tariffs must be made prior to the August 1, 2005, deadline, in the event that current negotiations between the two parties fail. The MFN tariffs are the tariffs that Canada charges on products that are not covered by preferential trading agreements such as NAFTA or those for developing countries.

A Canada Gazette notice invites Canadians to submit their views on this issue by June 25, 2005.

Since March 2004, Canada and the EU have been negotiating a market access settlement to resolve the current situation.

As of 10:15 a.m. today, the Department of Finance Canada’s public consultations Web site may be accessed at http://www.fin.gc.ca/activity/consult/MNFtar_e.html.

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For further information, media representatives may contact:

Andrea Lanthier
Press Secretary
Office of the Minister of International Trade
(613) 992-7332

Media Relations Office
International Trade Canada
(613) 995-1874
http://www.international.gc.ca