Trade
August 14, 2017, Washington - Foreign Affairs Minister Chrystia Freeland released Canada's list of key demands Monday for a new North American Free Trade Agreement as talks get set to begin in Washington later this week.

Freeland's list, which is much shorter than the U.S. wish list of more than 100 items, includes:
  • Protect Canada's supply-management system for dairy and poultry. Canada does not have free trade in these areas, and regulates imports and prices.
  • A new chapter on labour standards. The original NAFTA included a labour section as an addendum, inserted into the agreement after Bill Clinton was elected and insisted on a few changes. Some officials in Canada and the U.S. have identified a goal of tougher labour rules: Increasing Mexican wages, to make auto plants in the other countries more affordable.
  • A new chapter on environmental standards. This was also added as an afterthought to the original NAFTA, placed there after Clinton's election. Freeland says she wants a chapter that ensures no country can weaken environmental protection to attract investment. She also says it should support efforts against climate change.
  • A new chapter on gender rights.
  • A new chapter on Indigenous rights.
  • Reforms to the investor-state dispute settlement process. Specifically, Freeland referred to Chapter 11, which involves companies suing governments. She said she wants reforms so that ''governments have an unassailable right to regulate in the public interest.'' This is not to be confused with Chapter 19, which regulates disputes between companies over dumping, in cases like softwood lumber, and which the U.S. administration might seek to eliminate.
  • Expand procurement. For years, Canada has wanted to kill Buy American rules for construction projects at the state and local level. It could be a tough sell. U.S. lawmakers are demanding even more Buy American rules, which is something President Donald Trump campaigned on. Freeland said: ''Local-content provisions for major government contracts are political junk food: superficially appetizing, but unhealthy in the long run.''
  • Freer movement of professionals. NAFTA includes a list of professions where people can easily get a visa to work across the border. It's an old list, it mentions land surveyors and range conservationists, but not computer programmers. International companies want this list expanded to make it easier for employees to move between offices.
  • Protect cultural exemptions. Canada insisted on protections in the old agreement for cultural industries, like publishing and broadcasting. The U.S.'s annual report on international trade barriers lists this as an irritant.
  • Maintaining a process to regulate anti-dumping and countervailing disputes, like the one over softwood lumber. Freeland noted that Canada briefly walked out of the original talks in 1987, as this was a deal-breaker. The U.S. says it now wants to get rid of the resulting Chapter 19. Some observers say it might simply be modified.
The U.S. Department of Agriculture has found "systemic" inspection and sanitation problems during its most recent audit of Canada's meat, poultry and egg inspection systems, issues American officials say "raise significant questions about the Canadian system."

The most "significant" concern, U.S. auditors said, was that Canadian government plant inspectors were not checking for residual feces and digestive waste materials on each carcass in slaughterhouses prior to export.

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July 18, 2017, Ottawa, Ont. - A significant volume of dairy, poultry, eggs and beef was imported into Canada without a permit or paying the appropriate customs duties, hurting both the federal treasury and farmers, says Auditor General Michael Ferguson in his spring report to Parliament.

Analyzing figures from Global Affairs Canada and the Canadian Border Services Agency found “authorizations, certificates, and permits for those items that were on the Import Control List... did not match the volumes authorized for importing annually with the volumes that importers declared to the agency as eligible for a lower rate of duty,” Ferguson said.

The report estimates that $168 million in duties were not collected on $131 million worth of chicken, turkey, beef, eggs, and dairy products, meaning that seven to eight per cent were therefore imported without the appropriate permits.

Dairy had the biggest hit with $81 million in unassessed customs duties and $32 million of product entering the country without permits. Chicken was next with $50 million in unassessed duties and $20 million in products without permits. For turkey the figures $15 million and $9 million, beef $11 million and $41 million and eggs $11 million and $29 million. READ MORE
July 12, 2017 - Meat-importing countries from North America to Europe and Asia have tightened inspection standards for shipments from Brazil in a bid to protect consumers, following a probe into possible corruption involving inspectors.

The Canadian Food Inspection Agency (CFIA) said that the tighter inspection standards it enacted in April have resulted in checks on nearly every shipment from Brazil.

"The new Canadian protocols involve full inspection - including tests for pathogens and chemical residues - of all Brazilian meat imports on five consecutive shipments from each approved plant and for each product category," CFIA spokeswoman Maria Kubacki said.

Previously, CFIA conducted one full inspection randomly out of 10 consecutive shipments from each Brazilian plant.

The tougher reviews highlight concerns about the safety of Brazilian meat even among countries that still accept its products. The United States last week banned imports of fresh Brazilian beef after a high percentage of shipments failed safety checks.

Brazilian police raided the premises of global meatpacking companies JBS SA (JBSS3.SA) and BRF SA (BRFS3.SA) in March, as well as dozens of smaller rivals, over suspected bribery of health officials.

Since then, the U.S. Department of Agriculture (USDA) has re-inspected shipments of raw beef and ready-to-eat food products from Brazil and tested them for pathogens. All beef trimmings are now tested for salmonella and E. coli.

The checks have uncovered problems in fresh beef, including abscesses, blood clots, bones and lymphoid tissue, according to the USDA's Food Safety and Inspection Service Re-inspections at U.S. ports are directed by a centralized computer database that stores past inspection results from each foreign establishment. Better-performing foreign plants are subject to less frequent re-inspections, according to the USDA.

To meet the stiffer inspection requirements from importers, Brazil has raised its own standards for meat exported from the country.

"Meat-processing plants in Brazil are now blocked from shipping the front part of a cow as a whole piece, and must instead process it into cuts, a step that makes it easier to detect defects but adds cost for packers," Luis Rangel, Brazil's plant and animal health secretary, said in an interview.

“We had to raise the bar because of the United States, and ... you do not raise the bar for only one export market, you raise it for all of them," Rangel said. "Processing costs will rise, but that is necessary to preserve the markets."

Enforcing the higher standards is complicated, however, by a shortage of inspectors in Brazil.

In Europe, authorities now conduct physical checks of all animal-related shipments from Brazil, and perform laboratory tests on 20 percent of them, at the importers' cost, according to a document issued by the Council of the European Union on June 9.

The EU requires Brazil to conduct microbiological checks on poultry and other meats before they are shipped.

Hong Kong has since March boosted surveillance on Brazil's meat and poultry, including sampling for meat deterioration and other food safety concerns, a spokesman for Hong Kong's Center for Food Safety said. As of June 23, a total of 369 samples were tested and all were satisfactory, he said.
May 23, 2017, Washington, D.C. - The Trump administration set the clock ticking toward a mid-August start of renegotiations of the North American Free Trade Agreement (NAFTA) with Canada and Mexico to try to win better terms for U.S. workers and manufacturers.

With a letter to U.S. lawmakers, U.S. Trade Representative Robert Lighthizer said he triggered a 90-day consultation period with Congress, industries and the American public that would allow talks over one of the world's biggest trading blocs to begin by Aug. 16.

Renegotiation of NAFTA was a key campaign promise of U.S. President Donald Trump, who frequently called the 23-year-old trade pact a "disaster" that has drained U.S. factories and well-paid manufacturing jobs to Mexico.

Trump has pledged to use the NAFTA talks to shrink goods trade deficits that stood at $63 billion with Mexico and $11 billion with Canada last year, according to U.S. Census Bureau data.

Lighthizer told reporters NAFTA has been successful for U.S. agriculture, investment services and the energy sector, but not for manufacturing. He added that he hopes to complete negotiations by the end of 2017.

"As a starting point for negotiations, we should build on what has worked in NAFTA and change and improve what has not," Lighthizer said in a conference call with reporters. "If renegotiations result in a fairer deal for American workers there is value in making the transition to a modernized NAFTA as seamless as possible."

In his letter to congressional leaders, Lighthizer said NAFTA needs modernization for provisions on digital trade, intellectual property rights, labor and environmental standards, regulatory practices, rules for state-owned enterprises and food safety standards.

The Obama administration attempted to address many of these deficiencies in the 2015 Trans-Pacific Partnership trade deal, which included Canada and Mexico, but Trump pulled out of TPP in one of his first official acts as president.

Canada and Mexico both welcomed the U.S. move to launch a NAFTA revamp.

Mexican Foreign Minister Luis Videgaray, speaking at a news conference with Secretary of State Rex Tillerson in Washington, said the trade pact needed updating after nearly 25 years.

"The world has changed, we've learned a lot and we can make it better," he said.

Canadian Foreign Minister Chrystia Freeland said Canada was "steadfastly committed to free trade in the North American region," noting that 9 million U.S. jobs depend on trade and investment with Canada.

U.S. Chamber of Commerce president Thomas Donohue urged U.S. officials to "do no harm" to businesses that depend on trade with Canada and Mexico and to move quickly on a new trilateral deal.

As the administration took its first formal step toward NAFTA renegotiations, the U.S. Commerce Department launched an investigation on Thursday into Boeing Co's (BA.N) anti-dumping claims against Canadian rival Bombardier's (BBDb.TO) new CSeries jetliners, drawing a threat from Canada to review a deal to buy Boeing fighter jets.

Lighthizer's letter is less detailed than a draft sent to lawmakers in March, which listed as objectives tax equality and the ability to reimpose tariffs if Mexican and Canadian imports pose a serious injury threat to U.S. industry.

Trump late in April had considered a full withdrawal from NAFTA, but was persuaded by senior officials in his administration to pursue negotiations instead. Lighthizer said he did not think a new threat to withdraw from NAFTA would be necessary.

"As the president has said, we are going to give renegotiation a good strong shot," Lighthizer told reporters, adding that he believed Canada and Mexico would negotiate in good faith.

He said he hoped to maintain the current trilateral format of NAFTA, but noted that many of NAFTA's problems are bilateral issues that need to be worked out with either Mexico or Canada.

"Our hope is that we can end up with the structure similar to what we have now. If that should prove to be impossible, then we'll move in a different direction."

Asked if the NAFTA talks would seek to resolve trade disputes over imports of Canadian softwood lumber or Mexican sugar, Lighthizer said he hoped those issues would be settled before the NAFTA talks begin under separate negotiations being conducted by the U.S. Commerce Department.

A Canadian source close to the lumber negotiations said it was unlikely an agreement could be reached by mid-August, however.

Lighthizer said he will seek public comment on the NAFTA process and intends to publish negotiating objectives on or about July 16.
May 12, 2017, Ottawa, Ont. - Canada’s farmers and processors need the federal government’s help to navigate the increasingly complex labyrinth of international trade to ensure they have access to the foreign markets they depend on, according to a report released Tuesday by the Senate Committee on Agriculture and Forestry.

The committee met with over 500 witnesses and other stakeholders from across the country to examine international market access priorities for Canadian farmers and processors — a key contributor to the Canadian economy — to understand the challenges they face when exporting their products and to identify possible solutions to facilitate and encourage international market access.

The committee’s report, Market Access: Giving Canadian Farmers and Processors the World, outlines ways to ensure Canadian products get to shelves around the world.

World-renowned products like Quebec maple syrup, Alberta beef, blueberries from Atlantic Canada, Okanagan and Niagara wines, and canola from the Prairies all reinforce the Canada Brand.

The committee sees the Canada Brand as crucial to positioning Canadian products on the international stage.

The committee makes 18 recommendations in its report, including:
  • That the federal government eliminate non-tariff barriers to trade and pursue free trade agreements with other countries.
  • That all levels of government work together to eliminate interprovincial trade barriers and invest in rail, road and marine infrastructure to guarantee that Canadian producers and processors are able to efficiently transport their products to consumers.
  • That the federal government improve access to infrastructure grants for farmers and food producers who want to invest in new technologies, and that Employment and Social Development Canada and Immigration and Citizenship Canada create programs that help farmers hire foreign workers to address labour shortages.
Adopting the committee’s recommendations will help the government ensure that the Canadian agriculture sector continues to thrive.
May 11, 2017 - According to Reuters, China has lifted a ban on Canadian poultry imports implemented in 2014 following an outbreak of bird flu, its quality watchdog said in a statement on Thursday.

The ban had been in force since December 2014, when Canada reported the detection of H5-type bird flu on two farms in British Columbia.
May 5, 2017, Winnipeg, Man. - U.S. President Donald Trump’s criticism of the protected Canadian dairy system has emboldened U.S. farm groups to tackle other longstanding agriculture irritants, as the countries move toward rewriting trade rules.

U.S. poultry exporters, who include Tyson Foods and Pilgrims Pride Corp., as well as egg sellers, are expected to seek greater access to Canada’s tightly controlled market in renegotiations of the North American Free Trade Agreement (NAFTA).

The U.S., the world’s second-biggest chicken exporter, will demand market access gains at least equal to those they would have realized under the failed Trans-Pacific Partnership (TPP) deal, industry groups and experts say.

Canada currently allows tariff-free egg imports amounting to 2.98 per cent of Canadian production, and chicken imports worth 7.5 per cent. Imports would have doubled for eggs and jumped by more than one-quarter for chicken under TPP.

Last year, U.S. poultry sales to Canada totalled $509 million, while American egg and egg product exports to Canada amounted to $46 million, according to USAPEEC (all figures US$). READ MORE
April 21, 2017, Ottawa, Ontario - With Donald Trump ramping up his anti-Canada trade rhetoric, Justin Trudeau says the United States like other countries subsidizes its dairy and agriculture industries by hundreds of millions, if not billions, of dollars.

And the prime minister says he will continue to protect Canada's agriculture producers, including the supply management system, as he tries to engage in ''fact-based'' conversation with the U.S. administration on a variety of trade irritants.

''Let's not pretend we're in a global free market when it comes to agriculture,'' Trudeau said Thursday in a question-and-answer session with Bloomberg television that preceded Trump's latest trade invective.

''Every country protects, for good reason, its agricultural industries. And we have a supply management system that works very well here in Canada.... The Americans and other countries chose to subsidize to the tunes of hundreds of millions of dollars, if not billions of dollars, their agriculture industries, including their dairy.''

He said the U.S. currently enjoys a $400-million dairy surplus with Canada.

''So it's not Canada that is a challenge here.''

Minutes later came the now-familiar sight of Trump in the Oval Office, followed by a pointed attack on Canadian trade practices and the impact on U.S. interests.

''Canada, what they've done to our dairy farm workers, is a disgrace. It's a disgrace,'' Trump said. ''Rules, regulations, different things have changed. And our farmers in Wisconsin and New York State are being put out of business.''

Trump was echoing and amplifying the complaints of Wisconsin and New York governors, who say Canada's decision to create a new lower-priced, classification of milk product has frozen U.S. producers out of the Canadian market.

Trudeau acknowledged the concerns of those two states, but said he didn't want to ''over-react.'' It was Trudeau's first comment since Trump first attacked the Canadian dairy industry on Tuesday at an event in Wisconsin.

Canada's ambassador to the United States, David MacNaughton, fired back at Trump's criticism on Tuesday by writing to the governors of those two states telling them that the plight of their farmers was not Canada's fault. He said it was caused by U.S. and global overproduction of milk.

''Any conversation around that starts with recognizing the facts. Now I understand how certain governors are speaking to certain constituencies on that. It's politics,'' Trudeau said.

''Different countries have different approaches and we're going to engage in a thoughtful fact-based conversation on how to move forward in a way that both protects our consumers and our agricultural producers.''
April 20, 2017, Ottawa, Onario - Conservative leadership candidate Maxime Bernier has welcomed U.S. Donald Trump's swipe at the Canadian dairy industry, saying that it's not just American farmers who are losing out.

Bernier says Canadians suffer more under supply management than Americans and if elected leader he promises to abolish the system.

On Tuesday, Trump targeted Canada explicitly in taking the next steps in his ''Buy American, Hire American'' policy, suggesting Wisconsin farmers are suffering because of the Canadian system.

Supply management has long vexed conservatives because it stands in sharp contrast to their belief in free markets, but most refuse to suggest dismantling the system as there is support for it in key constituencies.

Among them is Quebec, but that's not stopped Bernier from lashing out against the farms in his home province who are part of the system, making him the lone leadership contender to do so.

Bernier calls supply management a cartel, a phrase his competitor Erin O'Toole says turns farming families into nothing more than political props.

O'Toole says Bernier's policy demonstrates a lack of understand of agriculture and that the current system has nothing to do with any market specific issues in the United States.
April 17, 2017, Chicago, IL - Global outbreaks of bird flu in poultry have altered the flow of U.S. chicken meat, eggs and grain around the world, adding to challenges faced by domestic exporters and giving a leg up to Brazil, which has so far escaped the disease.

Different strains of avian flu have been detected across Asia, Europe, Africa and in the U.S. in recent months, leading to the culling of millions of birds and a flurry of import restrictions on eggs and chicken meat.

U.S. grain traders such as Bunge and Cargill have lost business because poultry deaths have reduced feed demand. Some domestic poultry producers, though, have managed to boost sales by taking advantage of trading bans that hurt rivals.

Sanderson Farms, the third-largest U.S. poultry producer, said it sold more chicken to Iraq when Baghdad backed away from Europe’s poultry due to bird flu, or avian influenza (AI), in the bloc.

Iraq imported 84.2 million kg of U.S. chicken meat last year, about three per cent of total U.S. chicken meat exports.

Data on chicken exports is not yet available for March, when the U.S. confirmed its first case of a highly lethal form of bird flu in commercial poultry in more than a year.

After the finding, South Korea, suffering its own worst-ever outbreak of bird flu, blocked U.S. poultry and eggs. That shut off opportunities for U.S. exporters hoping to make sales to cover shortfalls in South Korea, said Keithly Jones, a senior economist for the U.S. Department of Agriculture (USDA).

Last month, USDA cut its forecast for 2017 U.S. egg exports by six per cent to 305 million dozen because of South Korea’s ban.

U.S. grain traders, who were grappling with a global supply glut before flocks in other countries were culled to contain bird flu, have faced lower demand for the corn and soybeans that provide feed for chickens.

Bunge, one of the world’s top grain and oilseed traders, told Reuters that shipments to South Korea for February and March declined “on the back of reduced feed productions.” Shipments have since been picking up, according to the company.

In March, Cargill said South Korea’s outbreak, in which about 35 million birds have been culled, contributed to a decrease in quarterly earnings in its global animal nutrition unit. READ MORE
April 11, 2017 - The Trump administration has taken its initial step in renegotiating the North American Free Trade Agreement (NAFTA), sending the U.S. Congress a draft list of priorities for the negotiation.

The letter makes reference to a number of changes, including the specific mention of “opening Canada’s protections on dairy and poultry imports.”

The letter also touches on government procurement, tax policy, intellectual property, and rules of origin for things like car parts, telecommunications and dispute resolution. It also suggests a mechanism to impose tariffs if imports flood in and threaten U.S. industry.

The U.S. Congress will now be involved in revising the list. The administration will then issue a formal notice that it wants to renegotiate the deal and spend a minimum of 90 days consulting lawmakers and industry. Formal talks with Canada and Mexico could begin this summer or fall. READ MORE.
April 11, 2017, Guelph, Ont – The proposed Plant and Animal Health Strategy for Canada was drafted together by governments, industry and others who play a role in safeguarding plant and animal health.

The strategy will protect plants and animals from new and emerging risks by focusing efforts more on prevention and increasing partner collaboration and coordination.

You are invited to join the conversation this month and contribute your ideas on the draft strategy.

Read the draft strategy and provide your feedback through one of the following options:
To be successful, the strategy must be shaped by and reflect views of all partner groups. This consultation provides the opportunity for all stakeholders to have a say in the final contents of the strategy.

Please provide your comments by April 30, 2017.

Contact the Canadian Food Inspection Agency with questions about the Plant and Animal Health Strategy for Canada or to request the consultation documents in an alternative format:
  • Online
  • By email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
  • By phone: 1-800-442-2342 / 1-613-773-2342
For the most part, European farmers view the liberalization of agricultural markets positively. Many felt that farmers were relying too heavily on subsidies, a dependence that negatively impacted markets. In terms of trade, the use of subsidies also disadvantaged some countries – particularly those in developing nations – and cost taxpayers dearly each year. In recent years, policy reform and the reduction of trade barriers have addressed these issues; now new problems have surfaced.
When a laying hen is finished laying she becomes “spent fowl,” with her meat used for deli purposes or tenderized and flavoured for soup or TV dinners. Much of this spent fowl is imported from the United States under no tariff restrictions, fulfilling a Canadian demand that does not displace broiler meat.
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