a) Introductions

The CCA co-chairs called the meeting to order and the agenda was adopted (Annex 1). A list of participants is attached (Annex 2).

b) Progress report on CCA Action Plan

It was agreed that the CCA minutes would continue to serve as a means of keeping the Province/State Advisory Group (PSAG) members informed of the CCA’s activities. Both countries also agreed to the timely submission of minutes.

It was also reaffirmed that the work of the PSAG supported and strengthened the CCA’s efforts, progress and achievements. In this regard it was noted that many of the PSAG 2002-2003 Work Plan items were being addressed under the CCA’s agenda.

c) U.S.-Canadian Cooperation on Dispute Settlement Mechanisms Paper

Both delegations noted the completion of this paper, which was requested by the PSAG, and its delivery to PSAG in advance of its April 2, 2003, meeting in Montreal.

Health Canada officials provided the CCA with an update on Canada’s new nutritional labeling regulations which were published in the Canada Gazette II in January 2003. According to the officials, the regulations will become effective within 3-5 years depending on the size of the company. They noted there were a number of differences with U.S. labeling guidelines, but that many are in the voluntary section of the Canadian regulations and that a meeting would be held later in the week with U.S. Food and Drug Administration (FDA) officials to discuss next steps concerning a contracted report by the Institute of Medicine providing advice on the selection of reference values for nutrition labeling with a view to establishing a common set of reference values for both countries. The U.S. delegation encouraged FDA and Health Canada to come together on a common label to facilitate trade.

An official from the Pest Management Regulatory Agency (PMRA) of Health Canada and the Office of Pesticide Programs of the U.S. Environmental Protection Agency provided an update on the recent activities of the NAFTA Technical Working Group (TWG) on pesticides. A number of achievements were noted, including the continued success of Joint Reviews and Work Shares as well as the further enhancement of regulatory and scientific capacity. Officials also noted the establishment of a framework for the submission of a NAFTA label during the joint review process. The NAFTA TWG on pesticides is in the process of establishing its next five-year plan.

PMRA officials also outlined a proposal to revoke Canada's general pesticide maximum residue limit (MRL) and replace it with specific MRLs for each pesticide and food combination below 0.1 parts per million (ppm). The reasons for this proposal include increased safety standards and more accurate exposure assessments based on world standards for setting MRLs. The proposal is going through a 90-day comment period. PMRA will examine comments received over the summer and plans to publish a refined proposal at a later date. In response to U.S. concerns as to how this will affect trade, PMRA noted that until MRLs under 0.1 ppm are established, they are proposing to use established U.S. levels in the interim. Per Canada’s request, the United States circulated information on the U.S. Environmental Protection Agency’s (EPA’s) Food Quality Protection Act (FQPA) implementaion.

The NAFTA TWG on Pesticides presentation was shared with the PSAG during their April 2, 2003, meeting.

During the discussion that followed, NAFTA TWG on Pesticides officials noted that stakeholders in all three countries are given the chance to participate in their process through two formal avenues: (1) when the Group meets for the yearly full meeting; one day is devoted to discussion with stakeholders, including growers, health and environment interests, labour groups and the pesticide industry itself; and (2) a national stakeholder meeting is organized in each country in advance of the Group’s meeting in order to give the opportunity for input to those who cannot travel to the actual meeting.

The U.S delegation reviewed a number of upcoming NAFTA and U.S./Mexico meetings scheduled for the month of April, including the NAFTA Sanitary and Phytosanitary (SPS) meeting scheduled for April 24, 2003, in Mexico. Regarding the NAFTA Committee on Agriculture (COA) meeting, the U.S. delegation noted that with the establishment of the CCAs with both Mexico and Canada, the meeting’s agenda should focus on a dialogue on broad issues rather than a review of irritants. Both sides agreed to consider agenda items along these lines, including a discussion of a paper on the benefits of NAFTA. The United States will ask Mexico to propose a meeting date.

The U.S. and Canadian delegations expressed their mutual disappointment that WTO Members had been unable to meet the March 31, 2003, deadline on modalities in the agriculture negotiations. However, both sides reiterated their commitment to the process and noted their intent to fully engage in the upcoming technical discussions. Both sides also discussed other issues of common interest before the WTO. Finally, Canada indicated its disappointment that the United States had decided to establish a WTO panel to examine Canadian grain and transportation sector policies.

The Canadian delegation reviewed the results of the recent meeting in Buenos Aires concerning the implementation of the Bio-Safety Protocol and acknowledged the positive co-operation between our two countries on this issue. Canadian officials then noted the upcoming North American Biotech Initiative (NABI) meeting in May 2003 and provided an update on the biotech labeling process in Canada. Both delegations also updated each other on their respective approval process for biotech wheat.

The Canadian delegation re-iterated its view that the COOL provisions of the U.S. Farm Act were fundamentally flawed and counter to the spirit of the CCA and ROU provisions, e.g. restricted feeder cattle. The Canadian delegation noted Canada’s submission of comments on both the utility of the guidelines as well as their record-keeping requirements and concluded by saying that Canada would continue to monitor developments to assess the consistency of the COOL provisions with international trade obligations.

The U.S. delegation responded that Canada’s comments had been received and they would be considered along with all other comments received. U.S. officials provided details of "listening sessions" which will occur in May and June this year in various U.S. locations. USDA plans to issue the final regulation by September 30, 2004.

The Canadian delegation provided an update on the implementation of the APF, noting that programming was to be implemented on April 1, 2003. While the process is still moving ahead, not all elements of the Business Risk Management (BRM) program were in place and a tribunal process would be organized to provide advice on the proposed changes to the stabilization component of the BRM. The U.S. delegation asked how the assistance will be notified to the WTO. In response, the Canadian delegation indicated that it was premature to speculate at this point, but that the notification would follow in due course.

Officials from the Canadian Food Inspection Agency (CFIA) updated the CCA on their plans to explore different options with respect to the accreditation of seed graders outside Canada to resolve the issue of access to Canada. Options to be examined include: (1) in the short term, accreditation of U.S. seed lab personnel; (2) in the medium term, recognition of USDA process verification program; and (3), in the long term, greater harmonization of seed certification and labeling requirements between Canada and the United States. The U.S. delegation said that they had been working closely with CFIA and hope for results soon. Both Canadian and U.S. leads welcomed this development.

With respect to the U.S. request for Canada to recognize the use of seed tags in place of phyto-sanitary certificates for seed exported to Canada, Canada noted that it recently received additional information from the U.S. Animal and Plant Health Inspection Service (APHIS) and is continuing its review of the U.S. system to ensure proper phyto-sanitary controls are in place. Canada indicated that once this is established, it would be able to go ahead with the necessary changes to accommodate the U.S. request.

CFIA officials noted that Flowers Canada had drafted a proposed program to deal with U.S. pest concerns related to the import of flowers into Canada from third countries and their subsequent re-export to the United States. They also noted that they are working with Flowers Canada to address concerns raised by the United States about the program. The U.S. delegation noted that APHIS has established a "pest identifier" at the port of Detroit to assist the flower trade in moving goods across the border.

d) Sugar Containing Product Monitoring

Canadian officials asked if there had been any reaction to the recent trade monitoring report issued by USDA to Congress and what USDA’s future plans were in reference to this report. USDA indicated there had been no reaction to the report and that they intend to issue one every six months, as required by the 2002 Trade Promotion Authority Act.

The U.S. delegation asked for an explanation of current meetings that are being held on Canada’s Ministerial Exemption (ME) guidelines. In response, CFIA officials stated that the purpose of these meetings is to ensure that all parties involved in the ME process are aware of their responsibilities and requirements. They also indicated that the potato sector was chosen for the first set of meetings as a majority of the MEs for potatoes will be issued in the upcoming months. CFIA officials also noted that both MEs and U.S. Marketing Orders were topics that had been discussed at length in the past and that while they have received general questions and concerns about how the Canadian system operates, no specific areas of concern are identified. The U.S. delegation noted that MEs is an issue raised often by their industry, and that there are segments of the U.S. industry that feel strongly that trade is restricted by the Ministerial Exemptions, and that they wished to present three ideas for consideration on how to improve the situation: (1) that Canada open the Ministerial Exemption application process to foreign producers; (2) that consideration of "shortages" be restricted to shortages in the receiving province; and (3) that price be included as a determining factor in the approval process. Officials from both countries agreed to discuss this issue as well as U.S. suggestions before the next CCA meeting in the Fall of 2003.

f) U.S.-Canada Tomato Trade

The Committee discussed the latest developments with the North American Tomato Trade Working Group (NATTWG) and noted its next meeting scheduled for later in April. The U.S delegation provided an update on a Florida tomato industry request to the United States Department of Agriculture (USDA) that it expand its marketing order coverage to include greenhouse and hydroponic tomatoes. USDA indicated it had not yet received a response to its request for further information from the Florida tomato industry, and as such, understood that the issue is dormant. USDA reiterated it is under no statutory or regulatory time frame within which to consider the request from Florida.

In regards to the U.S. tariff rate quota (TRQ) for peanut butter, the Canadian delegation outlined a number of process problems with implications for staff at both the Canada Customs Revenue Agency and U.S. Customs in Ottawa. As a means to reduce these process problems, the Canadian delegation said they were already working with U.S. Customs to receive names of companies importing peanut butter into the United States to assist with Canadian enforcement of export certificates, and suggested that the CCA recommend that both customs agencies examine different ways to administer peanut butter trade between Canada and the United States, including the requirement for a Canadian export permit as a condition of entry. In response, the U.S. delegation indicated that they operate their TRQs on a first-come, first-served basis and will therefore not consider export certificates as a condition for entry. The U.S. delegation also said it would reserve judgement on any recommendation until they have had time to consult with their customs officials.

The Canadian delegation asked for an update on the status of proposed U.S. regulations relating to industrial hemp and if a risk assessment will be performed. The U.S. delegation indicated that the final rule was published March 21, 2003, and was largely unchanged from the original. The U.S. government (USG) does not view this regulation as a sanitary and phyto-sanitary measure, but rather as an illegal drug enforcement issue, and therefore, it does not need to be notified to the WTO. Furthermore, they indicated that since the product in question is a controlled substance, not an agricultural product, the issue should be taken off the CCA agenda. Canada indicated it did not share that view, that a risk assessment being undertaken by Health Canada shows significant evidence of safe use of industrial hemp, contrary to the proposed U.S. regulations which undermine its legitimate use. Canada noted it would take under consideration the U.S. request to remove the item from the agenda.

Officials from the Veterinary Drugs Directorate (VDD) of Health Canada and the Centre for Veterinary Medicine (CVM) of the U.S. Food and Drug Administration provided an update on progress towards establishing a veterinary drug side-by-side table, noting their commitment to work towards the harmonization of maximum residue limits/tolerances in food. VDD officials indicated that they and officials from the CVM had met a few times over the past year to strengthen co-operation on various veterinary drugs issues including completing the table. Recently, leads on each side had been identified to move the process forward and a number of updates to the table had been made. Officials on both sides then noted some differences in the way maximum residue limits/tolerances are indicated in the table and informed participants that they have completed the draft text for clearance with CVM noting that further bilateral discussions will be required before the table can be finalized. CVM also indicated that the comparison table should be made available upon request. The CCA co-chairs asked that these discussions be made a priority in order to finalize the establishment of a veterinary drugs side-by-side table.

In response to U.S. and Canadian industry requests, Canadian officials indicated that the CFIA will implement a pilot project this year to permit the summer importation of U.S. feeder cattle into a single quarantine feedlot in Alberta and that additional feedlots could be added. A number of monitoring provisions will be put in place and an assessment of the project will be performed to determine if it can be continued or expanded. The project will cover Montana or North Dakota origin animals, with the main target period for import being August or September. The U.S. delegation welcomed the news. Canadian officials also noted that feeder cattle imports into Eastern Canada are permitted year round without testing for bluetongue with limits placed on their movement for one incubation period. As well, imports of feeder cattle from Hawaii are now permitted year round without restriction.

The Canadian delegation asked for an update and indication of when the United States would amend its regulations on the movement of horses from Canada into the United States pursuant to the U.S. commitment in the 1998 Record of Understanding. The United States responded that it remains concerned about the permanent movement of horses from third countries through Canada and continues to examine the information provided to USDA on Canada’s import requirements for horses from third countries. Technical discussions have been ongoing and will continue.

d) State Animal Health Requirements

Canadian officials raised some cases of U.S. State animal health authorities enforcing import requirements in excess of those administered by USDA/APHIS without any justification for this difference. It was noted that Wyoming now requires Canadian cattle to be quarantined as well as re-tested for tuberculosis. CFIA officials also indicated that they will be making the Deputy Administrator of USDA/APHIS aware of this specific case. U.S. officials indicated they would follow up with the States concerned. The U.S. delegation recommended that such issues should first be discussed with USDA/APHIS before bringing them to the attention of the CCA.

The Canadian delegation asked for an update on efforts to find a solution to the issue of a halt in imports of Canadian bison trimmings due to a USDA-FSIS ingredient policy. The U.S. delegation stated that Canadian bison meat is not prohibited entry, and that the question is whether bison meat that has undergone further processing can receive the FSIS mark of inspection. The U.S. delegation also indicated that they are examining the appropriate method (a change to regulation or statute) to permit the resumption of trade in bison trimmings and expect to have a result soon. The Canadian delegation noted that the Alberta plants in question were still in the queue for an inspection by the U.S. FDA and that there has been no further communication.

The Canadian delegation asked when a response could be expected to a recent letter from International Trade Minister Pettigrew to USTR Zoellick on this issue. The U.S. delegation indicated a response would be provided.

The Committee reviewed developments concerning the Agreement between Secretary Ridge and Deputy Prime Minister Manley for bilateral cooperation on bio-security under the Smart Border Plan. The meeting on April 7, 2003, was flagged as a further opportunity for Secretary Ridge and Deputy Prime Minister Manley to give direction, in particular to the bi-national committee. It was noted that agencies from both countries involved with the implementation of the Smart Border Plan are the Canadian Food Inspection Agency (CFIA), U.S. Animal and Plant Health Inspection Service (APHIS), U.S. Food and Drug Administration (FDA), U.S. Environmental Protection Agency (EPA) and the Department of Homeland Security (DHS). The Canadian delegation expressed its desire to re-establish regulatory relationships with APHIS personnel who were transferred to the DHS. The Canadian delegation suggested the CCA should follow developments on this issue to facilitate low risk movement between our two borders. The U.S. delegation thanked the Canadian delegation for the update and promised to continue working together on this issue.

The Canadian delegation noted its support for the objectives of the Bio-terrorism Act and expressed its thanks for the considerable effort made by the FDA to consult with stakeholders and the FDA’s stated commitment to work with a range of interests (including foreign governments) on the implementation of the Act. However, Canada has concerns relating to the trade impact of the regulations. A short summary was given on Canada’s two main specific concerns: 1) The proposed ‘noon the day before’ time period for prior notice of exports to the United States would severely hamper sectors dealing with just-in-time delivery or perishable products; and 2) Canadian exporters, who are often the U.S. "importer of record", should be able to make the notifications. Canada also noted that bio-terrorism regulations may become the model to follow in subsequent regulatory changes by other agencies or other countries so it was important that they be carefully drafted to take account of all factors. Official Canadian comments will be submitted to FDA by the April 4, 2003, deadline.

In response, the U.S. delegation asked to be copied on Canada’s comments to the FDA. The U.S. delegation noted that in today’s climate of heightened security concerns, border procedures would be affected, although it was emphasized that the FDA had consulted with the USTR in regards to the potential trade implications of the regulations. To this end the United States noted that it took the opportunity to notify the Act and the proposed regulations to the WTO Technical Barriers to Trade (TBT) and SPS Committees. With regards to Canadian comments about the potential precedent of the Act, the U.S. delegation emphasized that as a major agricultural exporter itself, the United States was aware of the possible implications for agricultural trade.

a) Transportation of Nursery Plants Through Seattle

The Canadian delegation raised their concern that horticultural products transshipped (sometimes from the Netherlands or Asia) through Seattle now have to undergo phyto-sanitary inspections at Seattle's SeaTac Airport, instead of the Washington State/British Columbia border. In response, the U.S. delegation noted that plants imported into the United States under a Canadian re-export phyto-sanitary certificate are required to go to a plant inspection station for clearance; and since there is no plant inspection station at the Washington State/BC border, these plants have to be sent to the SeaTac plant inspection station. USDA’s APHIS suggested that this issue should be further discussed at the bilateral technical meeting in May 2003.

The CCA co-chairs discussed the presentation to PSAG scheduled for April 2, 2003 and informed the PSAG co-chairs that minutes from the November 2002 meeting were available on the respective websites of FAS/USDA and DFAIT.

The CCA co-chairs met with PSAG representatives Rosann Wowchuck, Manitoba Minister of Agriculture and Food and Pat Takasugi, Secretary, Idaho Department of Agriculture, to discuss what transpired in the CCA meeting and to outline the presentation they would make to the PSAG meeting the next day. The PSAG representatives noted their appreciation for this opportunity and indicated their satisfaction with the working relationship that has developed between the PSAG and the CCA. The CCA will forward a contact list to the PSAG co-chairs for distribution to their members, as requested by the PSAG co-chairs.

It was agreed that the next CCA meeting would be held in the United States in October or November 2003.

a) Introductions

b) Progress report on CCA Action Plan

c) U.S.-Canadian Cooperation on Dispute Settlement Mechanisms Paper

a) Update on Pesticide Harmonization *Teleconference item

b) NAFTA Related Issues

c) WTO Related Issues

d) Biotech

a) U.S. Country of Origin Labeling (COOL)

b) Canada’s Agricultural Policy Framework (APF)

LUNCH

5. Plant Issues

a) Seed Certification Laboratory Accreditation

b) Seed Tag

c) Floriculture Industry Border Trade Concerns

d) Sugar Containing Product Monitoring

e) U.S.-Canada Potato Trade/Ministerial Exemptions

f) U.S.-Canada Tomato Trade

g) Peanut Butter

h) Industrial Hemp

a) Update on Vet Drugs Comparison *Teleconference item

b) Restricted Feeder Cattle Program *Teleconference item

c) Movement of Horses into the United States *Teleconference item

d) State Animal Health Requirements *Teleconference item

e) Bison Trimmings

f) Vancise Tort Case

BREAK

a) Ridge-Manley Smart Border Action Plan

b) U.S. Bioterrorism Act Implementation *Teleconference item

c) Recent U.S. Border Measures

a) Report to PSAG on CCA activities

b) Conversation with PSAG co-chairs

c) Next meeting

Andrea Lyon, Director, Tariffs and Market Access Division

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

Sudha Kshatriya, Senior Trade Policy Officer, Technical Barriers and Regulations Division

Eric 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

Rory McAlpine, Director General, International Trade Policy Directorate

Ian Thomson, Director, Western Hemisphere Division, International Trade Policy Directorate

Tina Milinetti, Deputy Director, Western Hemisphere Division, International Trade Policy Directorate

Todd Hunter, Trade Policy Analyst, Western Hemisphere Division, International Trade Policy Directorate

Janice Hopkins, Director, Pest Management Regulatory Agency

Mark Brohm, Project Officer, Pest Management Regulatory Agency

Diane Kirkpatrick, Director-General, Veterinary Drugs Directorate *

Dr. Vasu Dev Sharma, Chief, Clinical Evaluation Division, Veterinary Drugs Directorate*

Dr. Arnost Vilim, Team Leader, Human Safety Division, Veterinary Drugs Directorate *

Kathy Dobbin, Director, Partnerships and Outreach, Veterinary Drugs Directorate *

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

Ray Rush, Director, International Affairs

Ken Bruce, Bilateral Relations Officer, International Affairs

Dr. Brian Jamieson, Animal Health Division

Dr. Yudi Singh, Director, Plant Health Division

Mike Scheffel, Chief, Seeds Standards

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

Devry Boughner, Senior Economist, Office of Agricultural Affairs

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

Pauline Simmons, International Economist, Asia & the Americas Division, ITP

Audrey Talley, Sr. Marketing Specialist, Food Safety and Technical Services, ITP*

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

Dr. Bob Bokma*

Chuck Lambert, Deputy Undersecretary, Marketing and Regulatory Programs

Ken Clayton, Associate Administrator

Carla Denise D’Onofrio, Bureau of Customs and Border Protection

Office of Field Operations, Trade Compliance and Facilitation

Dr. Richard Ellis, Centre for Veterinary Medicine*

Environmental Protection Agency

Vera Soltero, Pesticides Technical Working Group*

Gary Groves, Agricultural Minister Counselor, Foreign Agricultural Service (FAS)

* By teleconference