RECORD OF UNDERSTANDING BETWEEN THE GOVERNMENTS OF CANADA AND THE
UNITED STATES OF AMERICA REGARDING AREAS OF AGRICULTURAL TRADE
December 2, 1998 8:30pm
In the spirit of friendship and frankness that characterizes relations between our countries, the Governments of
Canada and the United States of America have undertaken to discuss and resolve key issues in bilateral agricultural
Recognizing that agricultural and agri-food products comprise an important component of our vibrant and mutually
beneficial bilateral trading relationship, the Governments of Canada and the United States jointly reaffirm their
commitment to maintaining an open and dynamic trading relationship in these products.
Canada and the United States affirm their commitment to market-oriented agricultural policies and ongoing efforts
to promote more open and fairer trade in agricultural products. Canada and the United States further agree that
actions that disrupt trade should be avoided and commit to address issues before they become problems as the preferred
way of resolving bilateral trade differences.
Canada and the United States have agreed to work together to increase the broad dissemination of basic facts about
our bilateral agricultural trade and its impact on our agricultural and agri-food industries, particularly in the
grains and livestock/red meats sectors.
Canada and the United States also note the importance which our respective states and provinces attach to trade
in agricultural products, and strongly support an increased dialogue on these issues at the state-province level.
Canada and the United States emphasize the importance of Chapter 7 of the North American Free Trade Agreement (NAFTA)
on Agriculture and Sanitary and Phytosanitary Measures, and the World Trade Organization (WTO) Agreement on the
Application of Sanitary and Phytosanitary Measures, which require the application of objective, science-based criteria
as the basis for sanitary and phytosanitary measures. Chapter 9 of the NAFTA on Standards-Related Measures and
its associated annexes and the WTO Agreement on Technical Barriers to Trade govern the development and application
of technical requirements by Canada and the United States .
We agree that inspections will be based on scientific and technical principles. We reject the unjustified use of
these or other technical measures as barriers to legitimate trade.
The Canadian Minister of Agriculture and Agri-Food and the U.S. Secretary of Agriculture will meet at least annually
to review the state of our bilateral agricultural trade, to address any problems that might arise, and to foster
greater cooperation between the two countries on issues of common interest in other international fora. 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. Officials will meet within 30 days to continue discussions of the resolution of
outstanding agricultural issues and review progress of implementation of the agreement.
Canada and the United States agree to improve the management of bilateral agricultural trade relations by establishing
a comprehensive early-warning and consultation process to resolve problems at an early stage in their development.
Canada and the United States encourage the private sector, through industry associations, to engage in a similar
cross-border dialogue to increase our mutual understanding and our determination to resolve differences through
consultation and discussion. For this purpose, Canada and the United States agree to urge industry to establish
bilateral industry consultative mechanisms for grains, livestock and meats, and horticultural products.
Canada and the United States reiterate their strong commitment to resolving expeditiously any issues that might
be brought to the attention of the respective governments in a way that is consistent with rights and obligations
under the applicable international trade agreements. More specifically, Canada and the United States reaffirm their
commitment as contained in international trade agreements to ensure that all necessary measures are taken to meet
the obligations as contained in those agreements, including their observance by state and provincial governments.
The Governments of Canada and the United States have agreed to the attached comprehensive action plan, set forth
in Annexes 1 to 17, aimed at facilitating and expanding Canada-U.S. bilateral trade in agriculture and agri-food
products. The Annexes are an integral part of this Record of Understanding.
ACTION PLAN REGARDING AREAS OF AGRICULTURAL TRADE
This action plan is designed to strengthen and expand Canada-U.S. agricultural trade relations. It consists of
17 annexes as follows:
1. Import of U.S.
2. Expansion of
Northwest Cattle Project for Restricted Feeder Cattle
3. Animal Health Regionalization
4. Other Animal Health
5. Exchange of Cattle Data
6. In-Transit Movement
of Grain by Rail
7. Wheat Access Facilitation
8. Phytosanitary Requirements
for the Importation of U.S. Wheat
9. Other Grain Related
10. Seed Trade
11. Export Subsidies (Oats)
12. Veterinary Drugs
13. Pest Control Products
15. Joint Cooperation
17. Sugar-Containing Products
1. Import of
U.S. Swine for Immediate Slaughter
On December 3, 1998, Canada passed regulations that will allow U.S. slaughter swine to enter Canada from eligible
states without the testing and quarantine restrictions that are applied to breeding animals. The regulations governing
the import of U.S. slaughter swine are comprehensive. Importation under permit will be allowed to a previously
approved plant. The animals must originate from states that have reached Stages IV or V under the U.S. Pseudorabies
Eradication Program and travel to the Canadian plant along defined routes and within defined time frames.
2. Expansion of
the Northwest Cattle Project for Restricted Feeder Cattle
The Canadian "restricted feeder" regulations (Northwest Cattle Project) were amended on August 7, 1998.
"Restricted feeders" that originate from approved states may be exported to Canada during the fall and
winter months without test. The imported animals are treated for anaplasmosis following their arrival and are then
permitted to move without restriction. To qualify to export under the new regulations, states must be officially
free of bovine brucellosis and tuberculosis and be classified by Canada as low risk for bluetongue. Feeder cattle
have been entering Canada from Montana and Washington State under the provisions of the new regulations. States
that meet the same criteria and whose cattle producers wish to export to Canada under the regulatory provisions
for restricted feeders are encouraged to contact the Canadian Food Inspection Agency (CFIA). Under normal circumstances,
CFIA will evaluate and approve states within 2 weeks of request, dependent on the adequacy of information provided.
Importation under permit is allowed only to previously approved premises. In the United States, the health certification
of the animals and validation of their identification is completed by a U.S. Department of Agriculture, Animal
and Plant Health Inspection Service (USDA-APHIS) accredited veterinarian; there is no USDA endorsement of the export
If a country imposes new duties on cattle trade, the other country may re-balance
commitments made under this section for the duration of the duty increase.
3. Animal Health Regionalization
- Recognition of the Health Status of States/Zones
Canada has initiated a review of regulations governing the import of animals and their products, with a focus on
the principles of zoning and regionalization. The process is scheduled for discussion at the Canadian Animal Health
Consultative Committee meeting in December 1998. Both parties expect that Canada will publish a final regulation
during the first quarter of 2001.
4. Other Animal Health
Brucellosis and Tuberculosis (TB) Requirements
As part of the cooperative brucellosis program, some states have mandatory brucellosis vaccination requirements
for cattle within the state or imported from other states or countries. Some states also have additional testing
and/or certification requirements for a number of diseases beyond the U.S. federal import requirements. The following
steps will be taken to address this issue:
- The U.S. Department of Agriculture will obtain an updated list of U.S. state
vaccination and test requirements for brucellosis and TB for Canadian cattle by January 1999 and provide the list
to the Canadian Food Inspection Agency.
- The United States will notify state veterinarians of Canada's animal health status
no later than January 1999 and will work with states and industry to address inconsistencies between U.S. state
and federal requirements. Discussion between the USDA, state authorities, and industry will be scheduled during
the October 1999 U.S. Animal Health Association Meetings at which time states will be given the opportunity to
provide reports on actions to be taken to address these inconsistencies.
Equine Semen Imports
The United States requires an import permit and health certification for imports of equine semen from Canada. The
United States agrees to initiate the regulatory process to change these regulations to eliminate the permit and
certification requirements for equine semen imports from Canada and endeavor to implement a final rule eliminating
these permit and certification requirements not later than January 2000.
Inspection of Live Horses
The United States currently has regulations requiring inspection at the border of all Canadian horses presented
for permanent entry. Horses presented for temporary entry are not required to be inspected. The United States will
initiate the regulatory process to eliminate the inspection requirement for all horses and implement a final rule
eliminating this requirement by August 2000.
5. Exchange of Cattle
Canada and the United States will cooperate in the exchange of data on cattle trade and make publicly available
a joint report within 30 days that will identify data currently available from each side; requests for additional
data; and a proposal to address the needs for additional data. It is intended that the additional data will include
the number of cattle on feed, cattle inventory and cattle slaughter.
Movement of Grain by Rail
The Canadian Food Inspection Agency (CFIA) has developed an alternative certification program that will permit
shipments of wheat, oats, barley, rye and/or triticale, excluding seed, to transit through Canada based on a certificate
of origin in lieu of a phytosanitary certificate with mandatory sampling and testing. This will allow U.S. grain
to be shipped on the Canadian rail system to final destinations in the United States. A certificate of origin from
a state authorized under the program will be acceptable for grain if it meets all of the following conditions:
* the grain originates in U.S. approved states;
* the grain will transit through Canada only by rail (in sealed hopper cars);
* the grain will return to the United States; and
* the grain will not be unloaded in Canada.
The areas identified to participate in this program include the areas of Minnesota, Montana and North Dakota that
are recognized free of Karnal bunt, wheat flag smut, and dwarf bunt. This program will become effective as soon
as possible but no later than Jan. 1, 1999 for the states of Minnesota, Montana, and North Dakota. The program
will be reviewed, in cooperation with the United States, six months after implementation with a view toward expanding
the program to other interested states meeting the same program and science-based criteria as soon as possible.
7. Wheat Access
Facilitation Program for Canadian Licensed Primary Elevators Handling U.S. Wheat
The program will improve access for U.S. farmers to primary elevators in Western Canada, while preserving the integrity
of the Canadian grain quality control system. The program codifies the rules for handling of U.S. wheat by licensed
Canadian primary elevators. It will enter into force on January 1, 1999.
The Canadian Grain Commission (CGC) is giving advanced authorization to handle imported wheat from the United States
for those primary elevators that have indicated a desire to participate in the Wheat Access Facilitation Program.
Currently, 4 grain companies have proposed a total of 27 facilities for the program, most of which are located
within 60 miles of the Canada-U.S. border.
The program facilitates U.S. wheat being trucked and sold by or on behalf of U.S. producers to participating Canadian
primary elevators for storage and forwarding to domestic markets or export locations. This program complements
existing arrangements that facilitate the direct movement of U.S. wheat and barley to Canadian feedlots, feed mills
and flour mills.
Canada and the United States will jointly publish a fact sheet by January 1, 1999, explaining the program and how
producers can participate in the program.
Within six months of implementation, Canada, in cooperation with the United States, will examine how the program
has functioned with a view toward ensuring that it is working effectively and identifying potential ways to streamline
procedures including inspections. Within the twelve month initial phase of implementation, Canada, in cooperation
with the United States, will review the program. The review will include the clarity of the information provided
to U.S. and Canadian producers, the volume of shipments under the program, the effect of Canadian Customs procedures
and CGC inspections , and comments from U.S. and Canadian producers and Canadian elevators. The twelve month review
will also consider procedures under the program with a view to streamlining and reducing costs of the program within
30 days of conclusion of the twelve month review.
This program will not be extended to any state that fails to exempt Canadian grain from state research and promotion
check-off programs in a manner equivalent to that granted to grain from other sources.
requirements for the importation of U.S. wheat and other cereals into Canada
Wheat Access Facilitation Program - Phytosanitary Requirements:
A procedure has been developed with the cooperation of the Canadian Food Inspection Agency (CFIA) and the U.S.
Department of Agriculture, Animal and Plant Health Inspection Service (USDA-APHIS) that will reduce the amount
of sampling and testing required for U.S. growers participating in the Wheat Access Facilitation Program.
Individual participants (growers) may ship wheat under a "Master Phytosanitary Certificate" without the
requirement to have each individual shipment tested. Wheat must originate from an approved grower in states eligible
under the program, and at least one sample per grower, per crop, must be officially tested and found free of Karnal
bunt spores. The Master Phytosanitary Certificate must additionally satisfy requirements for dwarf bunt and flag
smut based on area freedom or official testing as appropriate.
This program will be implemented for North Dakota and Montana by January 1, 1999. The program will be reviewed,
in cooperation with the United States, six months after implementation with a view toward expanding the program
to other interested states meeting the same program and science-based criteria as soon as possible.
Following the recent review of U.S. National Karnal Bunt Survey data and the confirmation that no spores of Karnal
bunt were found in the non-infested states, CFIA has worked with USDA-APHIS to develop a certification program
that permits wheat to be imported into Canada without the current requirement for testing. Under this program,
wheat from approved states will be accompanied by a phytosanitary certificate that certifies that the grain is
produced in and shipped from a state that has been officially surveyed and found free from Karnal bunt.
Following discussion with USDA-APHIS to address concerns with the domestic movement of grain from the infested
areas, Canada will be prepared to implement the above-mentioned program in a progressive, risk based approach,
- after 3 years of national surveys, the states of MT, ND, MN, WI, MI, ME, VT,
NH, NY, MA, PA, NJ, RI and CT;
- after 4 years of national surveys, all of the United States except the infested
- after 5 years of national surveys, all of the United States except infested areas
of the infested states.
Canada will initiate the process to implement the above mentioned program immediately
with a view to operationalize the above program for the first tier of states by March 31, 1999.
Cereals (Wheat, barley, rye, oats)
As confidence is built through the Wheat Access Facilitation Program, the In-Transit Rail Program, and the above-mentioned
phytosanitary certification program, the CFIA will consider further steps toward recognition of area freedom for
Karnal bunt, dwarf bunt, and wheat flag smut. CFIA and APHIS will initiate discussions on the use of alternative
certification to the issuance of phytosanitary certificates for all cereals to recognize area freedom for Karnal
bunt, wheat flag smut and dwarf bunt. As a first step, the Canadian Food Inspection Agency will review the Pest
Risk Assessments (PRA) for each of the 3 diseases.
9. Other Grain Related
Grain Trade Consultations
In order to strengthen cooperation and trust on issues of mutual interest, Canada and the United States agree to
meet quarterly, or more frequently on request, to consult on global grain production and marketing. Such consultations
shall include the following:
- A projection of each country's respective production, utilization and ending
stocks of grain (including wheat, barley, corn and oats) for the current marketing year;
- A projection of the quantity, by commodity (including in the case of wheat, separate
projections for durum), of grain likely to be exported by each country to the other in the current marketing year;
- A projection of each country's use of subsidies, credit, or other means to facilitate
grain exports; as well as the use of aid programs (involving grain); in the current marketing year;
- A review of actions by third countries that may have an impact on global grain
- Such other grain production and marketing issues as may be raised by either country.
The first such consultations shall occur not later than February 1, 1999.
10. Seed Trade
The Canadian Food Inspection Agency (CFIA) and the Agricultural Marketing Service, U.S. Department of Agriculture
agree to meet with interested state, provincial and industry representatives in the first quarter of calendar year
1999 to develop initiatives to streamline requirements and facilitate seed trade.
11. Export Subsidies (Oats)
Canada and the United States note that in the last crop year more than 700,000 tons of heavily-subsidized European
Union (EU) oats were imported into North America. So far this crop year, more than 290,000 tons have been imported.
Noting that the EU has eliminated barley export subsidies to North America, Canada and the United States have agreed
to consider what steps might be warranted to achieve a similar result for oats.
12. Veterinary Drugs
Both the United States and Canada have stringent, scientifically based programs for the pre-market approval of
veterinary drugs. While there are some differences in the regulatory approaches adopted, the outcomes are essentially
equivalent in the protection of public health in the two countries.
A comparison made by the U.S. Food and Drug Administration and Health Canada has also indicated that both countries
have prohibited most of the same veterinary drugs for food producing animals.
To avoid future disruption in bilateral trade, Canada and the United States have agreed to the following initiatives
with respect to veterinary drugs:
- Prepare by April 30, 1999, a side-by-side comparison of veterinary drugs approved
for use in both countries, the food-producing animals to which these drugs can be administered, and the maximum
residue limits (MRLs) established for any foods resulting from such use.
- Bilaterally, work toward joint evaluation of drug submissions, and the harmonization
of MRLs for veterinary drugs which apply to domestic and imported foods.
- Trilaterally with Mexico, implement an effective work plan for the Technical
Working Group on Veterinary Drugs under the North America Free Trade Agreement Sanitary and Phytosanitary Committee.
- Multilaterally, work with Mexico to cooperate closely on matters related to the
Codex Committee on Residues of Veterinary Drugs in Foods.
13. Pest Control Products
To avoid future disruption in bilateral trade, Canada and the United States agree to the following initiatives
with respect to pest control products:
- The U.S. Environmental Protection Agency (EPA) and the Canadian Pesticide Management
Regulatory Agency (PMRA) will work with growers and registrants in both countries to accelerate bilateral harmonization
using the five year North American Initiative developed by the NAFTA Technical Working Group on Pesticides as the
framework. As a result of these efforts, there will be great potential for faster and simultaneous access to a
wider range of pest control products for both major and minor crops in both countries. However, the success of
this initiative hinges on the full and active participation of growers and registrants in both countries.
- EPA and PMRA will continue to cooperate with respect to U.S. implementation of
the Food Quality Protection Act.
- EPA and PMRA are committed to work together to develop a harmonized policy for
movement of treated seeds by December 1999.
- EPA and PMRA will investigate mechanisms to improve links with state/provincial/territorial
officials as a way of providing improved information sharing and a heads up mechanism for potential pesticide/trade
- Canadian canola growers have requested Canadian registrants to agree voluntarily
to remove canola/rapeseed claims from labels of registered canola seed treatments containing lindane by December
31, 1999. All commercial stocks containing lindane for use on canola and lindane treated canola seed would not
be used after July 1, 2001. This is contingent on registrants requesting voluntary removal. EPA, PMRA, growers
and registrants will continue to work together to facilitate access to replacement products.
- For those specific canola registration reviews undertaken by the EPA on an accelerated
basis, EPA and the PMRA will share work on evaluation of pesticide products to the furthest extent possible.
- EPA and PMRA will request U.S. and Canadian canola associations to prioritize
pesticide registration needs from a list of pesticides now available in either country which are pending approval
in the other country. The associations, in consultation with pesticide registrants, would also be asked to identify
alternatives to pesticides such as organophosphates (OPs) or others with risk concerns. The resulting list will
then be a basis for a longer term strategy to assure adequate, reduced risk pest control tools for canola growers
and will fit with current NAFTA efforts to promote a coordinated approach to Integrated Pest Management for canola.
- For dry beans (pulses), lentils, and flax (crops grown in rotation with canola),
EPA and PMRA will request that growers, in consultation with pesticide registrants in the United States and Canada,
identify and prioritize pest control tools and needs for purposes of identifying grower priorities for the agencies.
EPA and PMRA will jointly explore efforts to share work on evaluation of pesticide products.
- The U.S. Department of Agriculture (USDA) and Agriculture and Agri-Food Canada,
in conjunction with EPA and PMRA, will convene, preferably by March 1999, a high level meeting with Chief Executive
Officers of North American pesticide companies to encourage companies to take advantage of the pesticide joint
review process and to encourage industry's role in harmonization goals.
- USDA and Agriculture and Agri-Food Canada will jointly conduct a study of pesticide
price differentials within the United States and Canada to be completed within 6 months.
Produce Pesticide Testing
Canada and the United States have stringent, scientifically-based programs for the evaluation and monitoring of
pesticide residues. While there are some differences in the regulatory approaches adopted, the outcomes provide
essentially equivalent protection of public health.
The Food and Drug Administration and Canadian Food Inspection Agency agree to work toward reducing the sampling
of fresh produce through the exchange of scientific data, sampling plans and results, and taking such information
into consideration in the development of annual national sampling plans. Both agencies agree to review the operation
of import procedures with a view toward taking steps to streamline programs.
Bacterial Ring Rot Testing
In December 1998, the U.S. Department of Agriculture (USDA) and CFIA agree to work with appropriate industry, state,
provincial and scientific representatives to explore the benefits and possible implementation of harmonizing testing
procedures for bacterial ring rot of potatoes.
Canada and the United States agree to work aggressively and quickly to resolve outstanding potato industry issues.
Canada and the United States agree to ask the U.S.-Canada Ad Hoc Potato Committee to review the issue of regulatory
differences and restrictions affecting bilateral trade in potatoes and provide a report to Ministers by September
1, 1999, on how these issues might be addressed with a view to facilitating bilateral trade.
Nursery Stock Phytosanitary Requirements
The United States currently restricts certain nursery stock from Canada that has originated in other countries,
and then is grown for a time in Canada, to be exported to the United States. USDA and CFIA agree to form a joint
working group charged with moving this toward a resolution by prioritizing the regulatory changes in order to harmonize
import requirements for nursery stock from offshore sources. The working group will meet initially the first quarter
of 1999 with a view to identify and prioritize species where differences exist and identify time lines for implementation
of harmonization measures.
15. Joint Cooperation
Canada and the United States have enjoyed continued cooperation in the area of agricultural biotechnology. Both
countries use a science based approach to regulating products of biotechnology, including, but not limited to genetically
enhanced products. This approach means that regulatory decisions are predicated on a critical assessment of the
best available scientific information about the product and not on the process used to develop it.
In September 1998, Canadian and U.S. regulatory officials signed a technical agreement on the regulatory requirements
for the assessment of specific aspects of transgenic plants. Canadian and U.S. regulatory officials will continue
to meet to compare and harmonize where possible, the regulatory review process for transgenic plants and to discuss
and prioritize future areas of cooperation and information exchange that will facilitate the safe incorporation
of transgenic plants into agricultural production and commerce.
Canada and U.S. policy officials will continue to meet to discuss cooperation on multilateral biotechnology issues.
Canada and the United States will continue to work closely in areas relating to biosafety including the U.N. Biosafety
Protocol. Canada and the United States share common views on the subject of biotechnology in both the Sanitary
and Phytosanitary and Technical Barriers to Trade Committees of the World Trade Organization. In addition, both
countries are exploring the issue of how to deal with biotechnology within the WTO and its subsidiary agreements
as well as other fora such as the Organization for Economic Cooperation and Development, CODEX Alimentarius Commission
and Asia-Pacific Economic Cooperation. Canada and the United States will also work together to promote the science-based
approach to regulating biotechnology, including capacity-building.
Canada and the United States recognize the integrated nature of the North American agriculture and food economies
and agree that country of origin labeling requirements on agricultural and food products will be consistent with
obligations under the North American Free Trade Agreement and the World Trade Organization Agreement
17. Sugar Containing
No later than June 1, 1999, the United States will require an export permit issued by the Government of Canada
as a condition of entry into the United States for sugar-containing products of Canadian origin for which the exporter
or importer is claiming preferential tariff treatment. The products for which export permits will be required as
a condition of entry will be sugar-containing products provided for in additional U.S. Note 6 to Chapter 17 of
the Schedule of the United States annexed to the Marrakesh Protocol to the General Agreement on Tariffs and Trade