a) Introductions

The Canadian co-chairs welcomed and expressed their appreciation to the U.S. delegation for traveling to Ottawa for the meeting. The U.S. co-chairs thanked the Canadians for hosting the meeting. This was followed by introductions.

List of participants (Annex 1) and Agenda (Annex 2) are attached.

b) Provinces - States Advisory Group's (PSAG) issues review

Canada provided an update on the Provinces-States Advisory Group’s (PSAG’s) 2006-2007 activities and noted that the PSAG has requested the CCA to provide an update on ministerial exemptions. Additionally, Idaho and Minnesota requested updates on certain dairy issues. The United States offered to obtain more information from Idaho and Minnesota with respect to the dairy issues they would like the CCA to discuss.

a) Canada's proposed ban on the use of carbadox in swine production

Canada recalled that at the last CCA meeting, Health Canada provided information on Canada’s intent to ban Carbadox, and proceeded to provide an update on the regulatory process. Canada stated that it intends to ban the use of Carbadox by amending its Food and Drugs Regulations to add Carbadox as item "f" to the list of banned veterinary drugs. Canada indicated that it had completed consultations and that it hopes the amendments will be published in Canada Gazette Part I for comment by the end of summer 2006. Following a 90-day comment period, Canada will take into account comments received before proceeding to Canada Gazette Part II. The United States inquired about the transition period that would follow the amendments, and asked for an outline of the implementation process. Canada responded that the Canadian Food Inspection Agency (CFIA) will emphasize residue monitoring. Canada stated that its initial focus for monitoring will be on pork, although other products may be monitored later. The United States noted that at the last CCA meeting, Canada said it was working on a new testing methodology for assessing products for residue. Canada confirmed that its new testing methodology is in place, and has been shared with the USDA.

b) BSE

Canada stated that it hopes the U.S. second BSE rule will be published as soon as possible, and noted its appreciation of the commitment by senior USDA officials and Secretary Johanns to do so. In response to Canadian enquiries, the United States stated that it remains committed to normalizing trade and still plans to publish the second rule as soon as possible, but noted that the latest Canadian BSE case has caused some delay. The United States stated that it has no timeline to share, though it confirmed its intention that the second rule will be broad enough to include live breeding cattle. According to the United States, the second rule will not include animals other than cattle, such as sheep and goats, because the current World Animal Health Organization (OIE) guidelines do not cover these animals. Canada reiterated that including breeding animals in the second rule is very important, both to allow the resumption of Canadian exports to the United States, and to Mexico.

Canada provided an update on Canada’s recent BSE case and noted that investigation of animals of interest is nearing completion. This includes tracing back 146 cattle from the affected animal’s feed cohort and its two most recently born offspring. Of these groups, 74 cattle had died; some were deemed untraceable due to lack of information, 23 live cattle were located and 15 cattle were exported to the United States. The Canadian Food Inspection Agency (CFIA) tested 12 cattle potentially exposed to the same feed as the affected animal. All tests were negative. The remaining 11 cattle from the feed cohort are being evaluated for compensation purposes and will be tested shortly. The epidemiological report is expected to be released soon. The United States noted its confidence in Canada’s tracking and tracing systems and said that the U.S. Minimal Risk Rule recognized the possibility that other BSE cases could be discovered in Canada, and that the United States is committed to working with Canada to manage BSE in North America. Canada indicated that finding additional cases of BSE in animals born after the implementation of the feed ban is consistent with international experiences in managing BSE.

Canada informed the United States that it is making progress in re-gaining access to the Mexican market for live cattle. Breeding stock remains a significant issue for Canadian industry. Canada noted that U.S. producers can currently export live cattle to Mexico, but Canadian producers cannot because of the U.S. position that accepting imports of live animals from Canada would down-grade Mexico’s BSE risk status. The United States noted Canada’s frustration and said this issue would most likely be resolved by the previously mentioned BSE rule. The United States also noted that an import protocol with Mexico was underway but could not indicate when it would be finalized.

Both countries provided updates on proposed changes aimed at strengthening their respective feed bans. The United States noted that there are differences between the U.S. and Canadian lists of Specified Risk Material (SRM). Canada responded that its preferred option is the removal of all SRM due to its need to eradicate BSE as quickly as possible. Furthermore, Canada noted that the OIE is recommending the removal of all SRM, and that the removal of SRM is important for country risk categorization. In response to a U.S. enquiry, Canada noted that it does not foresee any adverse impact on trade with the United States as a result of the differences in the proposed feed ban rules. The United States stated that it is working on finalizing its feed ban, which was published for comment on October 6, 2005, but is not certain when the final rule will be published. The United States and Canada agreed on the importance of continuing to communicate on this issue.

Both countries provided an update on progress they made in regaining access to third country markets. Canada informed the CCA that of its top 10 historical export markets, it has regained partial access to at least 5. The five key markets that remain closed to Canadian beef include South Korea, China, Taiwan, Russia and Saudi Arabia. The United States stated that it had recovered US$2 billion – or 42% – of its international market access and noted the importance of regaining full access to Japan and South Korea, which represent 98% of U.S. beef exports. Canada was encouraged that the its trading partners did not restrict trade in Canadian beef as a result of the two new BSE cases in early 2006 due to the recognition that Canada’s risk level remains unchanged. Canada observed that this may also point to increased recognition of OIE standards.

Canada informed the United States that it is finalizing a risk assessment on small intestines as a risk material for BSE. Once the assessment is complete by Health Canada, the CFIA will develop import regulations based on these findings. Canada noted that it is not aware of any new science on this issue, and asked how the United States arrived at its decision regarding the removal of small intestines. The United States agreed to provide further information concerning its risk assessment.

The United States reinforced the importance of harmonizing regulations in general and continued engagement on bluetongue and anaplasmosis in particular, as these issues are particularly important to U.S. states. The United States noted that these issues are long-standing CCA agenda items, and that there is a need to show progress on them. Canada noted progress made on these issues, especially access for cattle from 39 states, and informed the United States that a final consultation paper, to be made available soon, is being prepared to examine possible changes to Canada’s management of bluetongue. Canada added that it is difficult to make the case that there is no need for Canada to require testing for bluetongue and anaplasmosis for imported breeding cattle when some U.S. states, such as New York, require this testing for breeding cattle imported from other U.S. States.

Canada informed the United States that by the end of June 2006, it would amend its prohibition order to reflect its new BSE policy for the importation of younger breeding cattle into Canada.

With respect to pseudorabies and swine brucellosis, Canada noted that there may be opportunities to change its import policy, by addressing the different classes of pigs (breeding, feeder, immediate slaughter) separately, as has been done for cattle.

The United States informed Canada that it is getting ready to "synchronize" its proposed T.B. rule in order to avoid any potential trade disruptions when the rule is implemented. The United States requested information on Canada’s regime. Canada responded that it had received the U.S. request for information, and that it will endeavour to provide the information by the end of May.

Canada informed the United States that as a result of a Federal Court of Appeal Ruling, which subjected certain milk protein concentrates to a lower tariff rate, Canadian producers have requested that Canada undertake WTO Article XXVIII negotiations to introduce a tariff-rate quota on milk protein concentrates. Canada stated that it was not pursuing an Article XXVIII negotiation, but instead was responding by encouraging a dialogue between processors and producers aimed at resolving a number of issues facing the Canadian dairy sector, including milk protein concentrates. The United States was encouraged by Canada’s position and noted the importance of future communication on this issue if need be.

The United States noted the progress made on this issue since the Fall of 2005 and indicated that it had consulted with industry stakeholders and was ready to re-engage in negotiations. Canada expressed appreciation for the collaboration between USDA and USTR on this issue, and observed that recent Canadian federal elections had slowed the negotiations and that the results of current consultations with stakeholders and provinces would determine next steps. Canada expressed interest in resuming negotiations, and said it would contact U.S. officials in the coming weeks.

The United States provided background on the detection of potato cyst nematode on April 19, 2006, in Idaho and expressed appreciation to Canada for its regional approach in dealing with the outbreak. Canada stated that the prohibition on nursery stock is a science-based interim measure and that this measure, along with others taken, will be reviewed on an on-going basis. The United States noted Canada’s participation in the ongoing APHIS investigation and highlighted the importance of continued collaboration on this issue. The United States stated the importance of negotiating a bilateral arrangement between the two countries towards the liberalization of potato trade as noted in previous discussions.

The United States noted that the U.S. industry is seeking a resolution to this long-standing CCA agenda item and is uncertain as to why Canada considers seed tags insufficient to meet its import requirements. The United States informed participants that at the May 16, 2006, grain bilateral meeting, APHIS will announce an additional certificate of origin to accompany shipments. Noting the ongoing nature of the issue, Canada stated its concern that the seed tag would not provide the equivalent guarantee of a sanitary certificate. Canada said it will provide feedback on the new APHIS certificate of origin in early fall, 2006, and that its officials might provide some preliminary views in August.

Wheat/barley exports to Canada

The United States noted that this issue is similar to the seed tag issue, i.e. the use of a certificate of origin as an alternative to a Phytosanitary Certificate. Canada confirmed that its pilot program to accept certificates of origin for wheat and barley exports is up and running, and that this approach may indeed form the basis to resolve the seed tag issue as well. Canada said it will examine the pilot project over the next two years with a view to finalizing a permanent system. As a result of the successful pilot program, both countries agreed to remove this item from future CCA agendas.

The United States informed participants that it is developing a system that would accredit U.S. officers to grade seeds based on Canada’s requirements. Canada reaffirmed its commitment to working through this issue and stated that a draft proposed regulation that will permit grading from outside Canada would be published in Canada Gazette Part I by July 1, 2006. Depending upon comments received, the final regulation would be published in Canada Gazette Part II by September, 2006, with the objective of having the regulations in place for the 2007 season.

Canada provided an update on work underway in the NAFTA Technical Working Group on Pesticides (TWG). Key projects include the development of NAFTA labels, which will standardize formats among NAFTA countries for new product registration, and progress on the joint review of pesticide products. Canada informed participants that in December, 2005, the Executive Board of the TWG agreed to facilitate a stakeholder process to explore options for developing and implementing NAFTA labels, and that a task force made up of growers, industry and government will be established to accelerate the process. With respect to the joint review of pesticide products, Canada said the TWG has accepted four new active ingredients and 22 registered new uses, established three workshare programs, and completed one minor-use pilot project. The NAFTA countries also resolved issues related to zone maps outlining residue trial requirements to support minor use label expansion. Canada, the United States and Mexico are also developing a statistically-based methodology that could be used as a standard for establishing and harmonizing maximum residue limits (MRLs/tolerances) among the NAFTA countries. Furthermore, in 2005, the three countries developed a common NAFTA import tolerance guidance for the establishment of pesticide MRLs/tolerances in the NAFTA countries. A NAFTA approach to setting import tolerances would benefit consumers, pesticide industry, growers, as well as facilitate joint or shared reviews among governments. Both countries noted the valuable work of the TWG towards harmonization. The CCA co-chairs invited the TWG to the August 2006 Tri-national Agricultural Accord meeting in Banff, Alberta, to update the P-SAG about its activities.

Canada provided an update on its general maximum residue levels (MRLs) policy. Canada informed participants about the significant feedback received on the consultation document, which was released on January 10, 2003. Canada hopes to release a second consultation document, which will propose the revocation of Canada’s "general MRL limit" of 0.1 ppm for products for which no MRL has been established, in the future. In replacing the general limit of 0.1 ppm, Canada will make use of specific U.S. MRLs below 0.1 ppm, and will also consider Codex Alimentarius Commission standards. Canada noted that this proposal will lead to further harmonization between Canada and the United States. In response to U.S. inquiries, Canada responded that it will not automatically set levels above 0.1 ppm, but will consider higher limits upon the request of a registrant when scientific justification is provided. Canada informed participants that its second consultation document will be released in the future. A formal proposal for regulatory changes will be published for comment in winter, 2006. Canada noted that some Canadian producers are concerned about a possible technology gap between the variety of chemicals available in Canada and in the United States. As such, Canada will ask registrants to seek registration of products in Canada. Canada also said its new Canada Pest Control Products Act will come into force around late June, 2006. The Act will give the Minister of Health expedited authority to establish MRLs, a change that will lead to faster establishment of MRLs.

The United States thanked Canada for its response to U.S. questions prior to the 2005 implementation/enforcement of Canada’s mandatory nutrition labeling regulations. Canada noted that information on this issue is available online and that many in industry chose to label prior to the 2005 deadline. Canada noted that it had amended the Canadian Guide to Food Labelling and Advertising and published the Nutrition Labelling Inspectors Tool Kit on its website to provide additional guidance on implementation of these regulations. While enforcement is the same for both imported and domestic products, some in the Canadian industry expressed concern that some imports are still not using the Canadian nutrition label. Canada pointed out that small businesses (under$1-million in sales before 2003), had an additional two years to comply with the nutritional labeling requirements. In response to U.S. enquiries, Canada noted that imports must meet the new requirements, though there is prioritization in enforcement based on risk at this time. As such, first priority will be given to bakery and cereal products, with particular focus on claims with respect to trans-fats and sodium content. Canada’s intent is to educate non-complying companies and get a written commitment for corrective action. The United States provided an update on U.S. nutritional labeling regulations, noting that FDA is in the process of preparing an Advance Notice of Proposed Rule Making (ANPRM) in order to obtain public comments on the recommendations of the Institute of Medicine (IOM) report "Guiding Principles for Nutrition Labeling and Fortification," which was commissioned by the two countries. The report will form the basis for discussions with regard to consistent approaches to reference values for nutritional labeling between the two countries.

Canada stated that it is working to finalize the proposed regulations based on the policy announcement made last year. Canada expects to publish the regulations in late summer or early fall, 2006, in Canada Gazette Part I for comment. Canada noted that the timing of publication in Canada Gazette Part II will depend on feedback received and that a lengthy comment period of 180 days may be provided due to the complexity of the proposal.

Canada provided an update on its policy review for highlighted ingredients and flavours. Canada stated it intends to work within the framework of the current regulations since consultations with industry indicate its comfort with the current policy. However, if it is determined that current policies are insufficient to promote compliance with existing legislation, Canada will look at new regulations. The first focus will be on bakery products and cereals. Canada will also monitor the number of complaints received.

Canada recalled that at the last CCA meeting, Canada promised to provide a copy of a consultant’s report that examined possible amendments to the container size regulations. Canada stated that the report, which took into account comments received from importers, exporters, and domestic manufacturers also examined standard container sizes for infant foods. Canada stated that the report recommended that standard container sizes be maintained for a variety of processed products. A copy of the report, which is also available on the Public Works and Government Services Canada website, was distributed to participants. With respect to timelines, Canada said it intends to publish draft amendments to the Processed Products Regulations in Canada Gazette Part I in Fall, 2006, for comments. The United States noted that some segments of the U.S. industry continue to be concerned that U.S. sizes will not be permitted under the draft amendments. Canada stated that producers can apply to bring in test sizes covered under the proposed regulations.

Canada said its Organic Production System draft regulations are expected to be pre-published in early summer, 2006. The United States stated that it has amended the "U.S. Organic Foods Production Act" (OFPA) and is in the process of rulemaking to change the National Organic Program (NOP) regulations in response to the final court decision, Harvey vs. Johanns, in order to resolve U.S. industry’s concerns with the NOP requirement to use only 100% organic feed for dairy cows in order to allow the use of NOP approved synthetic products. The United States noted that both countries should work towards recognition of conformity assessment measures within the NAFTA working group on food labelling, standards, and packaging since this will benefit both countries. The United States noted that it would be beneficial for both countries to work towards harmonization. The United States highlighted some differences between the U.S. and Canadian proposed approach, noting in particular that Canadian standards do not permit the use of Chilean nitrate, which is permitted in the United States. Canada confirmed that regulations will not allow the use of Chilean nitrates, and added that Canadian industry does not support their use. The United States noted that Chilean nitrates were discussed at the last Codex Alimentarius Commission meeting, where Chile offered to provide additional information. The United States also noted that when this issue is revisited by the Codex Alimentarius Commission, it hopes Canada will take into consideration any new Codex information.

f) Food Allergens

The United States requested an update on Canada’s publication of its allergen labelling regulation that was scheduled to be published in March of 2006. Canada noted it would provide the United States with a written response on the status of its regulation, which would likely be published in early fall 2006.

a) EU issues

Canada noted it is yet to see if its comments would be reflected in the final WTO dispute settlement panel report on the EU’s moratorium on approvals for genetically modified organisms (GMOs), scheduled for release on May 10, 2006. The United States thanked Canada for its cooperation on this issue, and noted that the EU recently released information on its new approval process for GMOs, including risk assessments. The United States was concerned that the new EU approval process may not facilitate product approvals. Canada noted that its industry is very concerned as well, and offered to share some of its analysis of the new EU approval process.

Both countries discussed the potential trade effects of the new EU regulations for mandatory labelling and traceability of genetically modified (GM) food and feed, which entered into force on April 18, 2004, and agreed to apprise each other on this issue.

With respect to the EU’s ban on the importation of beef from hormone-treated cattle, Canada noted that an advisory panel of scientific experts has been established and will hold its first meeting in summer 2006. Canada inquired as to whether the United States had restarted discussions with the EU on the ban. The United States said it would like to resolve this issue through negotiation, not litigation.

b) North American Biotech Initiative (NABI)

Canada provided an update on the last meeting of the North American Biotech Initiative (NABI), held on April 24 – 26, 2006, in Montreal, noting that topics of importance to both countries, including the Cartagena Protocol on Biosafety, adventitious presence of products, and social-economic issues as they relate to biotechnology, were discussed. Both countries noted that NABI represents a useful forum for information exchange and stressed the need to continue consultations on biotech issues, including potential concern over the interpretation of Article 18.2 of the Cartagena Protocol on Biosafety.

c) U.S. Country of Origin Labelling (COOL)

While pleased with the delay in implementation of the U.S. COOL until 2008 (with the exception of fish and shellfish), Canada is concerned about Montana’s plans to implement COOL for beef, pork, poultry and lamb on October 1, 2006. U.S. participants said their government is engaged with Montana on this issue. On implementation of federal COOL for fish and shellfish, the United States stated that it is currently implementing mandatory country of origin labelling for fish and shellfish, and is working with state governments to develop a compliance program by August or September 2006. In the interim, the United States will continue to educate stakeholders about compliance requirements.

d) FDA Bioterrorism Act prior notice rule status

Canada asked for an update on implementation of the U.S. Bioterrorism Act. The United States stated that requirements for the registration of facilities are already in place, noting that Canadian facilities represent the highest number of registered facilities. With respect to prior notice, the United States could not specify when the rule will be published but said Canada will be notified so it could submit comments. Canada thanked the United States for progress on prior notice and in-transit shipments destined to Campobello Island, noting the success in producing a risk-based process for implementation.

Canada said with the dissolution of Parliament in December 2005, the proposed CFIA Enforcement Act "died on the order paper", and noted there is no indication the current government will introduce a new bill. Both countries agreed to remove the item from the CCA agenda.

Canada noted that during the March 30-31, 2006, meeting of North American leaders in Cancun, Mexico, they recommitted to last year’s initiatives under the Security and Prosperity Partnership (SPP), and agreed to focus on 4 high priority themes, including further cooperation on avian and pandemic influenza.

Canada noted that both countries are developing procedures and protocols to manage the threat of avian and pandemic influenza on a North American basis. The United States noted the importance of keeping each other informed about steps to be taken in the event of an avian and pandemic influenza outbreak in North America. Both countries agreed on the importance of proper communication, in particular, the need to differentiate between events affecting wild bird populations and those affecting the poultry industry.

In response to a U.S. question, Canada noted that the creation of statutory trust provisions is a broad issue, which would involve amendments to Canada’s bankruptcy and insolvency laws. Canada stated that it is reviewing existing mechanisms that could address U.S. concerns regarding payment for product delivered to Canadian buyers.

The United States asked if Canadian CCA co-chairs would agree to U.S. previous requests to conduct one of the two annual meetings via teleconference, noting that if Canada concurs, both countries would amend the Record of Understanding to require only one meeting per year (The ROU indicates that "Sub-Cabinet level officials will meet at least twice per year to ensure that progress continues to be made on issues affecting access to each other’s markets"). Canada responded that the twice per year face-to-face meetings help to maintain momentum on important CCA agenda issues and that videoconferencing does not have the same dynamic. Parties agreed to discuss this issue further at their next meeting, which will be hosted by the United States in the fall of 2006.

a) Introductions

b) Provinces - States Advisory Group's (PSAG) issues review

a) Canada's proposed ban on the use of carbadox in swine production

a) Bilateral update on nutritional labeling

b) Bilateral update on food fortification policies, considering IOM recommendations

c) Canadian highlighted ingredients policies

d) Container sizes for processed infant food in Canada

a) EU issues