United States - Canada Consultative Committee on Agriculture (CCA):
May 17, 2004, Ottawa

1. CCA Business

a) Introduction

The meeting was called to order by the CCA co-chairs. The agenda (Annex 1) was reviewed and adopted with one addition by the United States under the Processed Food Product Issues, Canadian regulations of container sizes for infant food. List of participants (Annex 2) is attached.

b) PSAG Action Item Review

Both delegations noted that the CCA and the U.S.-Canada Provinces - State Advisory Group (PSAG) work plans were nearly identical. However, it was also noted that the joint communiqué from the March 2004 Trilateral Accord Meetings in Puerto Vallarta, Jalisco, Mexico, included references to issues on invasive species and customs duties on wine. It was agreed that the CCA would seek clarification from the PSAG on whether these items have been formally added to their work plan, and if so, more information on these issues would also be sought.

2. Animal Issues

a) Access for Restricted Feeders and other U. S. Cattle

Canada provided an update on its March 10, 2004, announcement of new import conditions for year-round importation of U.S. feeder cattle from a large number of U.S. states. Canada implemented the new policies at a time that national surveys of Canada’s cattle population have determined that Canada’s national cattle herd remains free of anaplasmosis, bluetongue and brucellosis, all of which occur within the United States.

Under the program, cattle from up to 39 states with a low or moderate occurrence of bluetongue can be imported as long as the state’s cattle herd is free of brucellosis and tuberculosis. This change was based on the findings of ongoing scientific research which has shown that the insect that normally spreads bluetongue in western Canada has a very poor ability to act as a vector for the disease outside of the Okanagan Valley of British Columbia (B.C.). With respect to the Okanagan Valley, importation will continue to be allowed only during the winter months.

Based on the findings of an Iowa State study on the efficacy of tetracycline in the treatment of cattle for anaplasmosis, Canada has removed the requirement that imported cattle feeders receive antibiotic treatment. Anaplasmosis risks are addressed through increased mitigating activities at the feedlot, which include enhanced vector control programs in importing feedlots and a requirement that importers have an adequate management system that will preclude the entry of imported feeder animals into Canada’s national herd.

The U.S. delegation expressed its appreciation for the Canadian Food Inspection Agency’s (CFIA) recent efforts to address this longstanding issue. APHIS noted its intention to submit further comments to the CFIA on the remaining questions it has about the new import conditions as described by the documentation provided to it, particularly with reference to brucellosis. The U.S. delegation also pointed out the need for continued work on other disease concerns like brucellosis that affect trade in other classes of U.S. cattle destined for Canada.

With the March formal announcement, Canada has implemented the policy to allow summer cattle importation as described. The movement of feeder cattle between the United States and Canada is currently prohibited for both directions because of BSE concerns. The cattle industry associations in both the United States and Canada have indicated their support for the program. It is Canada’s intention to carefully review the program following the initial year of summer importation, making modifications as appropriate. Discussions relative to the establishment of norms for the equivalency of the health status of our breeding cattle populations for diseases such as bovine tuberculosis and brucellosis are part of another forum and are not part of the feeder cattle import issue.

Canada indicated that from their point of view, this issue has been addressed and should be removed from the CCA agenda.

b) BSE

Canada expressed appreciation to the United States for the progress made to date to normalize trade but noted its disappointment that a small group of U.S. producers had succeeded in rolling back some of the advances due to a procedural issue. Canada also noted the January 13, 2004, and April 30, 2004, public commitments by President Bush to resolve the ongoing border situation for live animals and other low risk products as quickly as possible on the basis of science. Canada pointed out that its own commitment to normalize trade on this same basis has been consistently demonstrated:

Canada stated that North America must continue to show leadership by finalizing the November 4, 2003, rule as soon as possible and similarly, by initiating any supplementary rulemaking process required for live animals and products not included in the final rule.

The United States assured Canada that it is fully aware of the issues surrounding the detection of BSE in North America and that these are receiving attention and active involvement at the highest levels of the U.S. government, including the White House. Canada added that generally, U.S. industry remains very supportive of joint efforts to manage BSE on a North American basis and to normalize trade in live animals and other low-risk products as quickly as possible. On finalizing the November 4, 2003, rule, the United Sates underlined the need to obey the letter of the law to avoid any potential procedural delays. Canada stated that it understood the need to satisfy due process but encouraged the United States to continue to take a science-based approach to its decisions. Canada pointed out that the science indicates trade should resume and that normalizing trade as soon as possible will better the position of our integrated market to again participate in ruminant and ruminant product trade internationally. Both delegations agreed that the normalization of trade would be beneficial to our joint initiative in the World Organization of Animal Health (OIE) to adopt the most recent advances in the science on BSE in developing a more practical approach to trade when BSE is detected in a national herd.

c) Update on Avian Influenza

The CFIA provided an update on control measures put in place since the detection of avian influenza in B.C., including steps taken to depopulate all birds in the control area. Canada stated that it is confident that it is well on its way to eradicating the disease in B.C. Given there have not been any new positive cases identified since April 29, the CFIA reported it has put the general eradication order within the control area on hold in order to concentrate on depopulating commercial and backyard flocks within three kilometres of positive flocks.

The Canadian and U.S. delegations expressed appreciation for the close cooperation of their respective regulatory agencies that has resulted in a science-based approach being taken on both sides of the border when avian influenza was found in the United States and subsequently in Canada. Regionalizing the affected area minimized the trade impact of the detection of this disease. Both delegations also noted that they are working closely with other international export markets to achieve adoption of this same approach. The U.S. delegation expressed concern about the proximity of the affected region in British Columbia to the United States and informed Canada that the United States had set up an incident command post near the border to do surveillance of backyard flocks for additional protection.

d) Bison Trimmings

The Canadian delegation reiterated concerns raised during previous CCA meetings that Canadian bison trimming exports were stopped in the fall of 2001 as a result of the enforcement of a USDA-Food Safety Inspection Service (FSIS) ingredient policy. Canada stated that the issue concerns the recognition of Canadian produced bison trimmings as eligible ingredients in products produced in FSIS-inspected plants. FSIS clarified that it does not impose border restrictions on bison imports. FSIS then gave an update on its work to amend its exotic animal regulation stating that it is drafting regulations to propose allowing Canadian bison trimmings to be used as eligible ingredients.

3. Plant Issues

a) Seed Tag

The U.S. delegation thanked Canada for the progress made to date and indicated that APHIS is currently working on a draft proposal for review to permit the use of a certified seed tag in lieu of a phytosanitary certificate for certified seeds of known lineage and origin, originating from states recognized as free of Karnal Bunt. The United States indicated that once the review is completed, it would like to see the issue resolved before the upcoming fall. Canada responded that these are positive steps and noted that there appear to be 37 U.S. states that can meet the protocol. Canada noted that it will look forward to APHIS forwarding the protocol. Canada questioned if the protocol should be expected shortly and the United States responded that they were not sure of an exact timeframe.

b) Seed Certification Laboratory Accreditation

The United States requested an update on CFIA recognition of the process verification program for a USDA/AMS seed testing laboratory accreditation system. The United States also acknowledged CFIA’s input into the U.S. seed certification program and noted that it plans to have the program details finalized by summer with the program operational by fall. The United States indicated that it expects that Canada will be ready to recognize U.S. seed laboratories that certify U.S. seed to Canada. Canada indicated that the CFIA is working closely with the USDA and is ready to recognize one seed laboratory. Canada is currently exploring options to accredit graders working outside of Canada. Canada acknowledged that there is still work to do on logistics.

The United States replied that USDA/AMS has concerns with Canada’s recognition of graders, noting that having U.S. staff performing the grading would be integral to the success of the program. CFIA responded that there are still details to work out, that it would check and get back to the United States. The United States questioned if there was any need for an additional meeting and if so, suggesting such a further discussion could occur shortly. CFIA responded that it would also get back to the United States on this issue.

c) U.S. Sugar-Containing Products Quota

Canada indicated it wished to clarify the status of Canadian exports of sugar containing products (SCPs) within the global portion of the SCP tariff rate quota (TRQ) established by the United States. According to the U.S. customs tariff, Mexico is excluded from accessing the global portion of the SCP TRQ, but Canada is not specifically mentioned. The United States indicated that according to the 1997 understanding between the United States and Canada concerning trade in refined sugar and SCPs, Canada was specifically provided access to the global portion of the TRQ for refined sugar, but was not accorded access to the global portion of the SCP TRQ.

4. Processed Food Product Issues

a) Nutritional Labeling

US/FDA provided an update on discussions between the agency and Health Canada on the recommendations made in the recent study on dietary reference intakes by the Institute of Medicine of the National Academies of the United States. FDA indicated that it intends to consider jointly the study’s recommendations and to begin work shortly on how best to proceed towards the establishment of a common set of reference levels. Canada indicated that its new nutritional labeling requirements will come into effect December 12, 2005, as outlined in the legislation. If any changes to these requirements result from discussions with FDA, then the standard regulatory process will be followed. FDA indicated that the same process would be followed in the United States.

The CCA encouraged FDA and Health Canada to establish a common set of reference levels and labeling requirements to facilitate trade.

b) Canadian Food Fortification Policies

In response to a U.S. request, Health Canada provided an update on the development of new regulations on food fortification. Canada indicated it was preparing a document for public comment outlining the policy proposal and the regulatory changes required. While no specific date has been determined for its release, it is expected to be released in the near future. This initial consultation would be followed by the Canada Gazette process. Canada indicated any proposed changes would be notified to the WTO Committee on Technical Barriers to Trade. FDA responded that it looked forward to reviewing the documents and participating in Canada’s consultation process. Health Canada committed to provide FDA with the consultation document when it was available.

c) Canadian Highlighted Ingredients Policies

Canada provided an update on the consultation process it is undertaking before proposing changes to the labeling regulations governing highlighted ingredients and flavours on prepackaged foods. Canada indicated that it is considering a proposal that is very similar to the current FDA flavour and characterizing ingredient rules. CFIA agreed to continue to update FDA on the status of the proposal.

d) Container sizes for processed infant food in Canada

The United States asked for information about container sizes for processed infant food and expressed concerns that the current Canadian restrictions represent a technical barrier to trade. Canada responded that this is a processed product regulation issue that has been under review for an extended period of time. Canada agreed to notify U.S. concerns to the appropriate regulatory officials and to provide documentation outlining Canada’s regulatory requirements for container sizes for processed infant food.

5. Other Bilateral/Plurilateral Issues

a) Canada’s Implementation of May 2003 WTO Dairy Agreement

The United States informed Canada of its concern over the development of any potential plan for a new dairy export program and noted that it would view with skepticism any new Canadian dairy export program. Canada informed the United States that it was involved with provinces in conducting an assessment of the trade environment applying to Canadian dairy exports but that it was not considering the development of a new dairy export program at this time.

The United States requested an update on raw milk exports from the Georgian Bay Milk Company (GBMC), a non-quota holder based operation, and its appeal related to the re-regulation of all milk production and marketing in Ontario.

Canada indicated that on March 28, 2004, the Ontario Agriculture, Food and Rural Affairs Tribunal denied GBMC's latest appeal and gave the company a new transition period ending on July 31, 2004, to either purchase quota or exit the industry. On May 14, 2004, the Ontario Minister of Agriculture confirmed the Tribunal's ruling.

In response to a U.S. question, Canada indicated that both the Tribunal’s decision and the Ministerial review could be subject to judicial review should the GBMC decide to pursue this option. Canada also confirmed that the GBMC was the only company that has been permitted to continue non-quota holder operations. In addition, its production levels have been capped to past commercial export milk levels which are monitored by the Dairy Farmers of Ontario. The United States asked for data on the level of GBMC production which Canada agreed to provide.

b) Update on Pesticide Harmonization

The Canadian Pest Management Regulatory Agency (PMRA) and the U.S. Environmental Protection Agency (EPA) provided an update on the progress of the NAFTA Technical Working Group (TWG) towards regulatory harmonization of pesticide registration. Harmonization can provide users of pesticides with equal access to the same pest management tools. They reported that the TWG is focusing its efforts on encouraging joint reviews when new products are submitted for review in both countries at the same time. A harmonized NAFTA label is also being investigated. Work in this area on agricultural products has received support and interest by grower organizations, particularly those located along the U.S.-Canada border. However, the PMRA and the EPA pointed out that a NAFTA label would not be mandatory nor would it guarantee price harmonization, a current trade irritant.

Regarding Canada’s proposal to eliminate its 0.1ppm default maximum residue limits (MRLs), the PMRA indicated that the proposal will allow Canada to harmonize more with U.S. tolerance levels. Canada informed participants that comments are still being reviewed before moving to the next step, the publication of a formal proposal in Canada Gazette Part I. Canada noted that submissions were received from U.S. growers and chemical manufacturers. PMRA noted it would continue to share information with the EPA. The Canadian and U.S. delegations thanked the TWG for its accomplishments that represent the cutting edge of regulator to regulator cooperation. Achievements of the TWG can be found at:

http://www.hc-sc.gc.ca/pmra-arla/english/intern/twg-e.html http://www.epa.gov/oppfead1/international/naftatwg.

An update on the pulse pilot project was also given. The PMRA and the EPA reported that the pulse industry was asked to identify the MRLs they are most concerned about with regard to trade. When complete, the review process developed will be used as a template to address similar issues affecting other commodities. As an example, the EPA suggested that a similar pilot could emerge for potatoes. It was noted that an update of the pulse pilot was provided to the meeting of the Mid-Western Legislative Conference in Fargo North Dakota this year.

The CCA thanked the PMRA and EPA for their efforts on this initiative which is helping to facilitate trade. They also commended them on their activities with Mexico in this same regard.

c) WTO - Status of Doha Agenda

The U.S. and Canadian delegations exchanged information on current and prospective developments in the WTO negotiations on agriculture. The United States reviewed the current situation in the WTO agriculture negotiations, noting that the negotiations were in better standing than thought six months ago. Canada indicated that it had a similar view, acknowledged that there were still outstanding issues, but noted it was hopeful that a framework could be reached by the end of July 2004.

d1) EU Issues - WTO case on EU Biotech

The U.S. and Canadian delegations exchanged information on current and prospective developments on this issue, including the recent approval by the EU for the marketing of sweet corn produced through biotechnology. Both countries noted the high level of cooperation on the case and indicated that unless there was meaningful movement in the EU the WTO case development would continue.

d2) EU Issues - EU’s New Rules on Traceability

The U.S. and Canadian delegations noted that the new rules had been in effect for only a month, so no determination of the trade impact could be made yet. Both countries agreed to monitor the implementation of the rules and share information gathered of the impact on trade.

d3) EU Issues - EU Hormones Ban

The U.S. and Canadian delegations exchanged information on recent discussions with the EU regarding the hormones ban and what each saw as the next steps in the dispute.

d4) EU Issues - Animal By-products

The U.S. and Canadian delegations exchanged information on the May 1, 2004, implementation of the European Commission Animal By-Products Regulation which applies to products not destined for human consumption. Both countries noted the impact of the Regulation and agreed to continue to work closely on the issue.

The United States and Canada expressed the view that marketing concerns about products of biotechnology e.g., Roundup Ready wheat, need be addressed by all in a responsible manner. The United States also asked for an update on Canada’s voluntary labeling program for these products. Canada responded that the voluntary program was developed through a broad consultative process. It has also been tabled at the CODEX. In response to a U.S. query as to whether the program is being used by industry, Canada responded that the standard was in the process of being adopted by the Standards Council of Canada as a National Standard of Canada. It is expected that industry would use the standard, though AAFC is conducting an analysis to determine the amount of use.

On NABI, Canada reported that there had been three meetings to date, with a fourth meeting scheduled to take place in September, 2004, hosted by Canada. Canada noted that as an outcome, two North American Biotech Agreements have been signed. At the third meeting held in Miami, the United States identified areas of concern with the Commission for Environmental Cooperation (CEC) Secretariate Oaxaca Maize Report, regarding the preparation and consideration of the report. Mexico presented a Mexican study on transgenic maize and also highlighted key issues of concern regarding the CEC maize report. Other issues discussed included future roles for the Inter-American Institute for Cooperation in Agriculture (IICA), updates for initiatives on Codex, Canada’s voluntary labeling standard, NAPPO and the IPPC.

Canada asked how it might be possible to get industry and trade associations involved in the NABI process and suggested that this be discussed before the next meeting. Canadian industry has suggested that trade and marketing should come under the purview of the NABI. Discussions with industry would be useful on issues such as the Cartagena Protocol on Biosafety. Canada also raised the idea of discussing trilateral and bilateral arrangements with other countries.

f) Bioterrorism Act Regulations

Canada thanked the FDA for the 60-day extension granted for the Prior Notice Rule comment period. Canada also noted that many of its recommendations on the proposed Prior Notice and Registration rules were taken into account. Canada noted that the cost associated with compliance will be greater for smaller exporters and that there is a continued need to harmonize implementation timelines with other U.S. border initiatives.

The United States noted that FDA continues to work with Customs and Border Protection to harmonize the implementation aspect where possible and that implementation issues brought to U.S. attention by Canada will be addressed as necessary by either the FDA or CBP, as appropriate.

Both delegations raised concerns over the 40% rate of non-compliance for meeting regulatory requirements. The United States replied that the high non-compliance rate may reflect the fact that the FDA is not fully enforcing the regulations during this initial "educational" trial period. Canada asked when the third phase of the enforcement would come into effect. The United States replied that it was already scheduled to be in place but may not have been implemented yet. The United States agreed to obtain clarification on the enforcement implementation schedule.

Canada expressed its commitment to maintain and enhance protection from non-intentional threats. Canada noted that a trilateral approach was appropriate, but if bilateral methods already exist to deal with such threats, then they should be used to the full extent possible.

The United States likewise expressed its commitment to work with Canada and stated that the U.S. Department of Homeland Security would be the U.S. lead on this issue.

h) Country of Origin Labeling

Canada thanked the United States for extending the public comment period. However, Canada restated its position that the mandatory U.S. Country of Origin Labeling law is fundamentally flawed and that Canada has serious concerns that it will distort trade. If implementation proceeds, Canada would have no option other than to review legal remedies in response. Canada noted examples of the impact this law is already having on trade in fish and seafood products in advance of the publication of the final rule and its implementation scheduled for September 2004. The United States affirmed that Canada’s formal comments on the proposed final rule had been received and that along with other submissions, they were being given full consideration in the drafting of the final rule.

6. CCA Wrap Up

a) The United States asked that the ongoing discussions between the two countries on Canadian ministerial exemptions and section 8e of the Agricultural Marketing Agreement Act be recorded in the minutes. Both delegations indicated their commitment to meet in mid-June to continue ongoing efforts to identify and resolve their respective industry’s issues arising from these policies in a timely manner.

b) Next Meeting

The next meeting will be held during the fourth quarter of 2004. The possibility that one of the two annual meetings of the CCA be held by videoconference was raised by the United States. It was agreed that further discussion would take place in this regard.

c) Report to PSAG

Minutes of this meeting will be provided to the PSAG co-chairs.

United States - Canada Consultative Committee on Agriculture (CCA)
May 17, 2004, Ottawa
Agenda

1. CCA Business – 9:30

a) Introduction

b) PSAG Action Item Review

2. Animal Issues – 10:00

a) Access for Restricted Feeders and other U. S. Cattle

b) BSE

c) Update on Avian Influenza

d) Bison Trimmings

3. Plant Issues – 11:00

a) Seed Tag

b) Seed Certification Laboratory Accreditation

c) U.S. Sugar-Containing Products Quota

4. Processed Food Product Issues – 11:45

a) Nutritional Labeling

b) Canadian Food Fortification Policies

c) Canadian Highlighted Ingredients Policies

d) Container sizes for processed infant food in Canada

5. Other Bilateral/Plurilateral Issues – 13:30

a) Canada’s Implementation of May 2003 WTO Dairy Agreement

b) Update on Pesticide Harmonization

c) WTO - Status of Doha Agenda

d1) EU Issues - WTO case on EU Biotech

d2) EU Issues - EU’s New Rules on Traceability

d3) EU Issues - EU Hormones Ban

d4) EU Issues - Animal By-products

U.S.-Canada Biotech and Activity Related to the North American Biotechnology Initiative (NABI)

Bioterrorism Act Regulations

Ridge-Manley Smart Border Initiative

h) Country of Origin Labeling

6. CCA Wrap Up – 17:00

a) Next Meeting

b) Report to PSAG

Andrea Lyon, Director General, Trade Policy Bureau I

Christopher O'Toole, Senior Trade Policy Officer, Tariffs and Market Access Division

Michael S. Bowser, Senior Trade Policy Officer, Trade Remedies Division

Phil Calvert, Director, Technical Barriers and Regulations Division

Geoff Adams, Deputy Director, Technical Barriers to Trade Division

Chris Moran, Senior Trade Policy Officer, Technical Barriers and Regulations Division

Jodi Robinson, Trade Policy Officer, Technical Barriers and Regulations Division

John Masswohl, Agriculture and Fisheries Counselor, Canadian Embassy in Washington

Ron Krystynak, Agriculture Counselor, Canadian Embassy in Washington

Blair Coomber, Director General, International Trade Policy Directorate

Tina Milanetti, A/Director, International Trade Policy Directorate

Alan Schlachter, Senior Trade Policy Analyst, International Trade Policy Directorate

Matthew Cahoon, Senior Trade Policy Analyst, International Trade Policy Directorate

Tim Pettipas, Director, International Trade Policy Directorate*

Pam Cooper, Deputy Director, International Trade Policy Directorate

Raphael Sauvé, Trade Policy Analyst, International Trade Policy Directorate

Fred Gorrell, A/Director, Bilateral Relations Division

Sharon Flack, A/Senior Bilateral Relations Officer, Bilateral Relations Division

Dr. Brian Jamieson, Senior Veterinary Officer, International Trade, Animal Health Division*

Billy Hewitt, BSE Working Group*

Carla Barry, National Manager, Fair Labelling Practices, Bureau of Food Safety and Consumer Protection*

Claudine Page, Bilateral Relations Officer, International Affairs*

Janet Macdonald, Bilateral Relations Officer, International Affairs*

Dr. Margaret Cheney, Chief, Nutrition Evaluation Division, Bureau of Nutritional Sciences*

Kelly Butler, Section Head, International Affairs, Pest Management Regulatory Agency

U.S. Delegation List

Sharon Bomer Lauritsen, Deputy Assistant U.S. Trade Representative

Sage Chandler, Director, Canadian Affairs

Jason Hafemeister, Director of WTO Negotiations*

Patricia R. Sheikh, Deputy Administrator, International Trade Policy (ITP)

Pauline Simmons, International Economist, Asia & the Americas Division, Canada Desk

(ITP)

Audrey Talley, Deputy Director, Food Safety and Technical Services (ITP)*

Dr. Bob Bokma, APHIS/Veterinary Service*

Catherine S. Fulton, International Trade Services, Washington, D.C.

Chris Salisbury, Import-Export Programs, Office of International Affairs

Walter Batts, Deputy Director, Office Of International Programs, Office Of The Commissioner*

Wanda Kelker, Team Leader, Compliance & Enforcement, Office of Nutritional Products, Labeling & Dietary Supplements, Center for Food Safety & Applied Nutrition*

Lorry Frigerio, Office of Pesticide Programs, Government and International Services Branch*

Gary Groves, Agricultural Minister Counselor

Debbie Seidband, CMP/G&F (TDY)

Bud Locklear, Economic Specialist

* By teleconference

Last modified: Friday, November 18, 2005