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<title>CANADA TAKES FURTHER ACTION TO SUPPORTCANADIAN BEEF INDUSTRY</title>
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<p><font size="+1"></font><font size="+1"><strong>July 18, 2003 <em>(2:05 p.m. EDT)</em> No. 102</strong></font></p>
<p align="CENTER"><font size="+1"><strong>CANADA TAKES FURTHER ACTION TO SUPPORT</strong></font></p>
<p align="CENTER"><font size="+1"><strong>CANADIAN BEEF INDUSTRY</strong></font></p>
<p>The Government of Canada today announced that it has taken further measures to support domestic beef and veal producers
in facing the challenges and uncertainty brought on by the single case of bovine spongiform encephalopathy (BSE).</p>
<p>Specifically, the Government is taking several steps to help Canadian beef suppliers by encouraging the consumption of
Canadian beef.</p>
<p>First, all applications received after July 9, 2003 for imports of non-NAFTA beef and veal above amounts already agreed to
under WTO rules (called "supplemental imports") will normally be refused. This action is being taken to increase
opportunities for Canadian beef and veal suppliers. </p>
<p>Second, a government-industry committee has been charged with examining various aspects of the current policy on
supplemental beef imports. The committee, which will take into account the views of all stakeholders (including cattlemen,
packers, importers and processors), has been asked to report to the Minister for International Trade and the Minister for
Agriculture and Agri-Food by August 8, 2003. The policy regarding supplemental imports of non-NAFTA beef products
outlined above will stay in effect until the ministers have reviewed the committee's report and made decisions regarding
next steps.</p>
<p>"We have taken these steps in order to maximize the opportunities for Canadian beef and veal producers while we work to
restore access to vital export markets," said International Trade Minister Pierre Pettigrew. "The Government remains
committed to supporting Canadian beef and veal producers during these difficult times."</p>
<p>"As discussed with my provincial colleagues, 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 ministers also noted that the Government will reassess its supplemental import policy, in consultation with industry
stakeholders, once the U.S. has announced that it is reopening its border to Canadian beef and veal products.</p>
<p>The Notice to Importers covering the supplemental import permit system has been modified to reflect the above change and
is available at</p>
<p><a href="https://bac-lac.wayback.archive-it.org/web/20071123031558/http://www.dfait-maeci.gc.ca/~eicb">http://www.dfait-maeci.gc.ca/~eicb</a></p>
<p>- 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/20071123031558/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>Vern Greenshields</p>
<p>Senior Communications Advisor</p>
<p>Office of the Minister of Agriculture and Agri-Food</p>
<p>(613) 759-1020</p>
<p>Media Relations </p>
<p>Agriculture and Agri-Food Canada </p>
<p>(613) 759-7972</p>
<p>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/20071123031558/http://www.dfait-maeci.gc.ca/">http://www.dfait-maeci.gc.ca</a></p>
<p align="CENTER"><font size="+1"><strong>Backgrounder</strong></font></p>
<p align="CENTER"><font size="+1"><strong>CANADA'S BEEF AND VEAL TARIFF RATE QUOTA</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 WTO. Imports entering Canada within this TRQ quantity are duty-free. Imports above this level normally pay a duty
of 26.5 percent. The Minister, however, may authorize supplemental duty-free imports of non-NAFTA beef over the TRQ
level.</p>
<p>Imports from the United States 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 for New Zealand and 35,000 tonnes for
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><strong>Supplemental Import Policy</strong></p>
<p>Within the above framework, the Government's supplemental import policy normally provides Canadian value-added
processors with access to offshore beef of similar quality and price as is available to U.S. processors.</p>
<p>On June 4, the Government announced changes to the beef supplemental import policy to support the domestic industry in
meeting the challenges and uncertainty brought on by the discovery of one cow with BSE. The June 4 changes included the
following requirements:</p>
<p>• Firms wishing to apply for beef and veal supplemental imports of non-NAFTA beef were required to first offer the
opportunity to supply their needs to at least five Canadian suppliers.</p>
<p>• Supplemental imports of non-NAFTA beef would normally not be allowed if a Canadian supplier was able to meet the
applicant's needs at prices competitive with a similar product imported into the United States.</p>
<p>The other existing policy conditions in effect before June 4 remain unchanged, including the condition that supplemental
imports will not normally be permitted if the price of offshore beef entering Canada is lower than the price of similar goods
entering the United States. </p>
<p>On June 18, federal, provincial and territorial ministers of agriculture announced a national program to provide temporary
assistance to help the Canadian cattle and beef industry continue to operate while borders are closed. This assistance
includes compensation to producers when the price of cattle falls below a reference price, and incentives for processors to
sell surplus meat cuts produced after May 20 that would normally have been exported. More details can be found at
<a href="https://bac-lac.wayback.archive-it.org/web/20071123031558/http://www.agr.gc.ca/cb/newsroom_e.phtml">http://www.agr.gc.ca/cb/newsroom_e.phtml</a></p>
<p>On July 10, federal, provincial and territorial ministers of agriculture announced further improvements to the national
program and also asked the Minister for International Trade to take further action on the beef and veal supplemental import
policy, with a view to ensuring maximum opportunity for Canadian producers. More details on the meeting of the federal,
provincial and territorial agriculture ministers can also be found at <a href="https://bac-lac.wayback.archive-it.org/web/20071123031558/http://www.agr.gc.ca/cb/newsroom_e.phtml">http://www.agr.gc.ca/cb/newsroom_e.phtml</a></p>
<p>The Government continues to work vigorously, in cooperation with the provinces, territories and industry to restore
Canada's access to its export markets.</p>
<p><strong>What's New</strong></p>
<p>The June 4 changes to the beef and veal supplemental import policy have created greater opportunities and delivered results
for domestic beef and veal producers. However, domestic producers continue to face major challenges and uncertainties
brought on by the single case of BSE. </p>
<p>To further support domestic producers, effective for requests received on or after July 10, applications for supplemental
import authorizations will normally be denied.</p>
<p>In addition, a government-industry committee has been charged with examining various aspects of the current policy on
supplemental beef exports. The committee will identify specific cuts or types of beef that are not available in Canada, i.e.
for which substitute products are not available, and will examine other details of the current supplemental beef import
policy and procedures. </p>
<p>This work would be undertaken with a view to providing further opportunities for domestic suppliers of Canadian beef and
veal, while taking into account the interests of all stakeholders. The group will report jointly to the Minister for
International Trade and the Minister of Agriculture and Agri-Food by August 8, 2003. The policy regarding supplemental
imports of non-NAFTA beef products outlined above will stay in effect until the ministers have reviewed the committee's
report and made decisions regarding next steps.</p>
<p>The above actions are being taken following consultation with beef industry stakeholders, including the Beef and Veal
Tariff Rate Quota Advisory Committee.</p>
<p>Importers will also still be allowed to import non-NAFTA beef and veal under the TRQ. As of mid-July, the TRQ was
about 70 percent filled, leaving roughly 22,000 tonnes of non-NAFTA beef and veal to be imported this year under the
TRQ. In addition, more than 15,000 tonnes of unused supplemental import authorizations, issued prior to July 10, remain
valid.</p>
<p>Since supplemental import authorizations are imports over and above Canada's import commitments under the WTO, the
change in the supplemental import policy does not affect Canada's international trade commitments.</p>
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