Chapter Seven
Agriculture
Article 701: Agricultural Subsidies
1. The Parties agree that their primary goal with respect to agricultural subsidies is to achieve, on a global basis, the elimination of all subsidies which distort agricultural trade, and the Parties agree to work together to achieve this goal, including through multilateral trade negotiations such as the Uruguay Round.
2. Neither Party shall introduce or maintain any export subsidy on any agricultural goods originating in, or shipped from, its territory that are exported directly or indirectly to the territory of the other Party.
3. Neither Party, including any public entity that it establishes or maintains, shall sell agricultural goods for export to the territory of the other Party at a price below the acquisition price of the goods plus any storage, handling or other costs incurred by it with respect to those goods.
4. Each Party shall take into account the export interests of the other Party in the use of any export subsidy on any agricultural good exported to third countries, recognizing that such subsidies may have prejudicial effects on the export interests of the other Party.
5. Canada shall exclude from the transport rates established under the Western Grain Transportation Act agricultural goods originating in Canada and shipped via west coast ports for consumption in the United States of America.
Article 702: Special Provisions for Fresh Fruits and Vegetables
1. a) Notwithstanding Article 401, for a period of 20 years from the entry into force of this Agreement, each Party reserves the right to apply a temporary duty on fresh fruits or vegetables originating in the territory of the other Party and imported into its territory, when:
i) for each of five consecutive working days the import price of such fruit or vegetable for each such day is below 90 percent of the average monthly import price, for the month in which that day falls, over the preceding five years, excluding the years with the highest and lowest average monthly import price; and
ii) the planted acreage in the importing Party for the particular fruit or vegetable is no higher than the average acreage over the preceding five years, excluding the years with the highest and lowest acreage.
b) The temporary duty referred to in subparagraph (a) may be applied on a regional or national basis, and the import prices and planted acreage will then be determined on a regional or national basis, as appropriate.
c) For purposes of calculating the planted acreage referred to in subparagraph (a)(ii), any acreage increase attributed directly to a reduction in wine grape planted acreage existing on October 4, 1987 shall be excluded.
2. Any temporary duty applied under this Article together with any other duty in effect for the particular fresh fruit or vegetable shall not exceed the lesser of:
a) the applicable most-favoured-nation (MFN) rate of duty that was in effect for the particular fresh fruit or vegetable prior to the date of entry into force of this Agreement determined with reference to the same season in which the temporary duty is applied; or
b) the MFN rate of duty in effect for imports of that particular fresh fruit or vegetable at the time the temporary duty is applied.
3. Any temporary duty shall only be applied either once per twelve-month period per good nationally or once per twelve-month period per good in each region. If a temporary duty is initially applied in one or more regions, any later application in a different region during that twelve-month period shall be based on a later five consecutive working day period under subparagraph 1(a)(i). No temporary duty shall apply to goods in transit at the time the duty is applied.
4. Such a temporary duty shall be removed when, for a period of five consecutive working days, the representative F.O.B point of shipment price in the exporting Party exceeds 90 percent of the average monthly import price referred to in subparagraph 1(a)(i), adjusted to an F.O.B point of shipment price, if necessary, and in any event shall be removed after 180 days.
5. Prior to the application of the temporary duty, the importing Party shall provide to the exporting Party two working days notice and an opportunity to consult during those two working days.
6. No Party may introduce or maintain any action under this Article on a particular good during such time as an action is maintained under Chapter Eleven (Emergency Action) on the same good.
7. For purposes of this Article, fresh fruit or vegetable shall mean any good classified within the following tariff headings of the Harmonized System (HS):
HS Tariff Heading Description
07.01 potatoes, fresh or chilled
07.02 tomatoes, fresh or chilled
07.03 onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or
chilled
07.04 cabbages, cauliflowers, kohlrabi, kale and similar edible brassicas, fresh or chilled
07.05 lettuce (lactuca sativa) and chicory (cichorium spp.), fresh or chilled
07.06 carrots, salad beets or beetroot, salsify, celeriac, radishes and similar edible roots (excluding turnips), fresh or chilled
07.07 cucumbers and gherkins, fresh or chilled
07.08 leguminous vegetables, shelled or unshelled, fresh or chilled
07.09 other vegetables (excluding truffles), fresh or chilled
08.06.10 grapes, fresh
08.08.20 pears and quinces, fresh
08.09 apricots, cherries, peaches (including nectarines), plums and sloes, fresh
08.10 other fruit (excluding cranberries and blueberries), fresh.
8. The Parties shall, upon the request of either Party, consult con-cerning removal of any temporary duty applied under paragraph 1.
9. For purposes of this Article, a region in Canada means:
a) British Columbia, Alberta, Saskatchewan, Manitoba, and that part of Ontario west of 89° 19' longitude (Thunder Bay);
b) Quebec and that part of Ontario east of 89° 19' longitude (Thunder Bay); or
c) New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland.
Article 703: Market Access for Agriculture
In order to facilitate trade in agricultural goods, the Parties shall work together to improve access to each other's markets through the elimination or reduction of import barriers.
Article 704: Market Access for Meat
1. Neither Party shall introduce, maintain or seek any quantitative import restriction or any other measure having equivalent effect on meat goods originating in the territory of the other Party except as otherwise provided in this Agreement.
2. If a Party imposes any quantitative import restriction on meat goods from all third countries, or negotiates agreements limiting exports from third countries, and if the other Party does not take equivalent action, then the first Party may impose quantitative import restrictions on meat goods originating in the territory of the other Party only to the extent and only for such period of time as is sufficient to prevent frustration of the action taken on imports of the meat goods from third countries. The Party contemplating the action shall notify the other Party and provide an opportunity to consult prior to taking action pursuant to this paragraph.
Article 705: Market Access for Grain and Grain Products
1. Commencing at such time as the level of government support for any of the grains wheat, oats, or barley in the United States of America becomes equal to or less than the level of government support for that grain in Canada, Canada shall eliminate any import permit requirements for wheat and wheat products, oats and oat products, or barley and barley products, as the case may be, originating in the territory of the United States of America, except that Canada may require that the grain be:
a) accompanied by an end-use certificate which has been completed by the importer of record declaring that it is imported for consumption in Canada and is consigned directly to a milling, manufacturing, brewing, distilling or other processing facility for consumption at that facility;
b) denatured if for feed use; or
c) accompanied by a certificate issued by Agriculture Canada, or its successors, if for seed use.
2. The Canadian Grain Commission, or its successors, shall be responsible for monitoring compliance with subparagraphs 1(a) and (b) and shall freely provide the end-use certificate required in subparagraph 1(a).
3. For purposes of paragraph 1, wheat, oat and barley products shall be defined as processed or manufactured substances which contain alone or in combination more than 25 percent by weight of such grain or grains. Any grain for which import permit requirements have been eliminated in accordance with paragraph 1 shall be excluded from this definition.
4. The method for calculating the level of government support referred to in paragraph 1 is set out in Annex 705.4.
5. Each Party shall, for purposes of restricting the importation of a grain or of a grain product due to its content of that grain, retain the right, to the extent consistent with other provisions of this Agreement, to introduce or, where they have been eliminated, reintroduce quan-titative import restrictions or import fees on imports of such grain or grain products originating in the territory of the other Party if such imports increase significantly as a result of a substantial change in either Party's support programs for that grain. For purposes of this paragraph, grain means wheat, oats, barley, rye, corn, triticale and sorghum.
Article 706: Market Access for Poultry and Eggs
If Canada maintains or introduces quantitative import restrictions on any of the following goods, Canada shall permit the importation of such goods as follows:
a) the level of global import quota on chicken and chicken products, as defined in Annex 706, for any given year shall be no less than 7.5 percent of the previous year's domestic production of chicken in Canada;
b) the level of global import quota on turkey and turkey products, as defined in Annex 706, for any given year shall be no less than 3.5 percent of that year's Canadian domestic turkey production quota; and
c) the level of global import quotas on eggs and egg products for any given year shall be no less than the following percentages of the previous year's Canadian domestic shell egg production:
i) 1.647 percent for shell eggs;
ii) 0.714 percent for frozen, liquid and further processed eggs; and
iii) 0.627 percent for powdered eggs.
Article 707: Market Access for Sugar-Containing Products
The United States of America shall not introduce or maintain any quantitative import restriction or import fee on any good originating in Canada containing ten percent or less sugar by dry weight for purposes of restricting the sugar content of such good.
Article 708: Technical Regulations and Standards for Agricultural, Food, Beverage and Certain Related Goods
1. Consistent with the legitimate need for technical regulations and standards to protect human, animal and plant life and to facilitate commerce between the Parties, the Parties shall seek an open border policy with respect to trade in agricultural, food, beverage and certain related goods and shall be guided in the regulation of such goods and in the implementation of this Article and the Schedules contained in Annex 708.1 by the following principles:
a) to harmonize their respective technical regulatory requirements and inspection procedures, taking into account appropriate international standards, or, where harmonization is not feasible, to make equivalent their respective technical regulatory requirements and inspection procedures;
b) to apply any import or quarantine restriction on the basis of regional rather than national distribution of diseases or pests in the territory of the exporting Party, where such diseases or pests are distributed regionally rather than nationally;
c) to establish equivalent accreditation procedures for inspection systems and inspectors;
d) to establish reciprocal training programs and, where appropriate, to utilize each other's personnel for testing and inspection of agricultural, food, beverage and certain related goods; and
e) to establish, where possible, common data and information requirements for submissions relating to the approval of new goods and processes.
2. The Parties shall, with respect to agricultural, food, beverage and certain related goods:
a) work toward the elimination of technical regulations and standards that constitute, and prevent the introduction of technical regulations and government standards that would constitute, an arbitrary, unjustifiable or disguised restriction on bilateral trade;
b) exchange information, subject to considerations of confidentiality, related to technical regulations, standards and testing; and
c) notify and consult with each other during the development or prior to the implementation or change in the application of any technical regulation or government standard that may affect trade in such goods.
3. Where, for agricultural, food, beverage and certain related goods other than animals:
a) the Parties have harmonized or accepted the equivalence of each other's inspection systems, certification procedures or testing requirements, and
b) the exporting Party has, pursuant to such systems, procedures or requirements, determined or certified, as the case may be, that such goods meet the standards or technical regulations of the importing Party,
the importing Party may examine such goods imported from the territory of the exporting Party only to ensure that (b) has occurred. This provision shall not preclude spot checks or similar verifying measures necessary to ensure compliance with the importing Party's standards or technical regulations provided that such spot checks or similar verifying measures, including any conducted at the border, are conducted no more frequently than those conducted by the importing Party under similar circumstances with respect to its goods.
4. To further the implementation of this Article and the Schedules contained in Annex 708.1:
a) the Parties shall establish the following working groups, each with equal representation from each Party:
i) Animal Health,
ii) Plant Health, Seeds and Fertilizers,
iii) Meat and Poultry Inspection,
iv) Dairy, Fruit, Vegetable and Egg Inspection,
v) Veterinary Drugs and Feeds,
vi) Food, Beverage and Colour Additives and Unavoidable Contaminants,
vii) Pesticides, and
viii) Packaging and Labelling of Agricultural, Food, Beverage and Certain Related Goods for Human Consumption;
b) these working groups shall:
i) meet at the request of either Party, but in any event not less than once a year unless the Parties otherwise agree, to further the implementation of this Article and the Schedules contained in Annex 708.1 or to address other issues as they arise, and
ii) inform the joint monitoring committee of their work; and
c) the Parties shall establish a joint monitoring committee, with equal representation from each Party, which shall meet at least annually and which shall:
i) monitor the progress of the working groups to ensure the timely implementation of this Article and the Schedules contained in Annex 708.1, and
ii) report the progress of the working groups to the Minister of Agriculture for Canada and the Secretary of Agriculture for the United States of America and such other Ministers or Cabinet-level officers as may be appropriate and to the Commission referred to in Chapter Eighteen (Institutional Provisions).
Article 709: Consultations
The Parties shall consult on agricultural issues semi-annually and at such other times as they may agree.
Article 710: International Obligations
Unless otherwise specifically provided in this Chapter, the Parties retain their rights and obligations with respect to agricultural, food, beverage and certain related goods under the General Agreement on Tariffs and Trade (GATT) and agreements negotiated under the GATT, including their rights and obligations under GATT Article XI.
Article 711: Definitions
For purposes of this Chapter:
agricultural goods means all goods classified within chapters 1, 2, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 19, 20, 21 and 24 of the Harmonized System and all goods classified within the following specific tariff headings of the Harmonized System:
05.02 to 05.11.10 inclusive
05.11.99
16.01
16.02
16.03 (extracts and juices of meats only)
22.01
22.02
22.09
23.01.10
23.02 to 23.09 inclusive
33.01
33.02
35.01 to 35.05 inclusive
40.01
41.01 to 41.03 inclusive
43.01
51.01 to 51.05 inclusive
52.01 to 52.03 inclusive
53.01 to 53.05 inclusive;
agricultural, food, beverage and certain related goods means all agricultural goods, all goods classified within chapter 3 of the Harmonized System, and all goods classified within the following specific tariff headings of the Harmonized System:
16.03 (other than extracts and juices of meat)
16.04 to 16.05 inclusive
22.03 to 22.08 inclusive
23.01.20
29.36
29.37
29.40 to 29.42 inclusive
30.01 to 30.04 inclusive
31.01 to 31.05 inclusive
32.03
32.04 (food, drug or cosmetic dyes and preparations only)
38.08
39.17.10
44.01 to 44.18 inclusive;
animal means any living being other than a human or a plant;
equivalent means having the same effect;
export subsidy means a subsidy that is conditional upon the exportation of agricultural goods. An illustrative list of such export subsidies is found in paragraphs (a) to (1) of the Annex to the Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade;
harmonization means making identical;
import fee means a fee on imports, including a fee applied pursuant to Section 22 of the United States Agricultural Adjustment Act of 1933, as amended, but excluding a customs duty as defined in Chapter Four (Border Measures);
import price means the value for imports into a Party determined for customs purposes by the customs authorities in that Party, except that, in the case of imports sold on a consignment basis, a Party may use the price reported for such sales adjusted to the same pricing basis as the value determined for customs purposes;
meat goods means meat of cattle (including veal), goats, and sheep (except lambs), whether fresh, chilled or frozen;
standard means a technical specification approved by a recognized standardizing body for repeated or continuous application, with which compliance is not mandatory;
sugar means sugar derived from sugar cane or sugar beets;
technical regulation means a technical specification, including the applicable administrative provisions, with which compliance is mandatory; and
technical specification means a specification contained in a document that lays down characteristics of a good such as levels of quality, performance, safety or dimensions. It may include, or deal exclusively with, terminology, symbols, testing and test methods, packaging, marking or labelling requirements as they apply to a good.
Annex 705.4
Levels of Government Support for Wheat, Oats and Barley
I. Formula and Rules for Computation
1. This Annex shall apply to each of the grains wheat, oats and barley until such time as import permit requirements have been eliminated for that grain pursuant to Article 705.
2. This Annex shall apply only to the calculation referred to in Article 705 and shall not be construed as a statement by either Party of the support it provides for any other purpose.
3. For purposes of paragraph 1 of Article 705, where the level of government support in a Party for wheat, oats or barley is compared to the level of government support in the other Party for that grain, the level of government support in a Party shall be the average of the percentages, computed in accordance with paragraph 4, for the two most recent crop years for which data are available.
4. Government support for wheat, oats or barley for a crop year shall be determined in accordance with the following formula, expressed as a percentage:
Government Support = Total Government Support
Adjusted Producer Value
where:
Adjusted Producer Value means the value of production for wheat, oats or barley for that crop year plus direct government payments for that crop year;
Direct Government Payments means payments that are directly made to producers of wheat, oats or barley and that are associated with the production of that grain for that crop year, excluding any such payment to reduce the costs of production; and
Total Government Support means all government programs or other means of government support directed towards affecting the income of producers of wheat, oats or barley from that grain for that crop year.
5. For purposes of Article 705, Schedules 1 and 2 set forth all government programs and other means of providing support for wheat, oats or barley as of October 4, 1987 and the method for computing the levels of government support as of that date.
6. The computation referred to in paragraph 5 may be adjusted to reflect modifications to government programs or means of support, new programs or means of support, and the availability of new types of data.
7. a) Where government support is measured on the basis of a calendar year and cannot be attributed to a crop year, it shall be attributed to the crop year beginning in that calendar year.
b) Where government support is measured on the basis of a fiscal year and cannot be attributed to a crop year, it shall be attributed:
i) for Canada, to the crop year beginning in that fiscal year;
ii) for the United States of America, to the crop year ending in that fiscal year.
c) All government expenditures shall exclude user contributions.
8. For purposes of this Annex, government data published or otherwise made officially available shall be used, unless clearly inappropriate.
9. All computations shall be done on the basis of the currency of the Party providing support.
II. Institutional Procedures
10. The Parties shall establish a Working Group with three representatives from each Party.
11. The Working Group shall:
a) exchange information related to government programs for wheat, oats or barley; and
b) discuss the computation of the level of government support in each Party for wheat, oats or barley.
12. Each Party shall, by January 1 of each year unless the Parties otherwise agree, forward to the other Party all available relevant data for the computation of the forwarding Party's level of support for wheat, oats and barley for the two most recent crop years for which data are available. Each Party shall forward to the other Party all other relevant data when available.
13. Each Party shall, by April 1 of each year unless the Parties otherwise agree, determine its level of support for wheat, oats and barley pursuant to paragraph 3 and immediately forward such determination and supporting computations to the other Party.
14. The Parties shall, upon request of either Party, consult regarding such determination.
15. Each Party shall notify the other Party of its acceptance or rejection of the other Party's determination within 30 days of receipt of such determination.
16. If a Party does not accept the other Party's determination, either Party may refer the matter to an arbitration panel pursuant to Article 1806.
17. The panel shall be established upon the date of such referral and shall establish its own rules and procedure.
18. The panel shall be appointed pursuant to paragraph 3 of Article 1807.
19. The panel shall issue its written decision within 30 days of the date the chairman is appointed. The Parties mutually agree that such decision shall be binding.
Schedule 1
United States Government Support Programs
A. Direct Payments
1. Payments of the Commodity Credit Corporation (CCC)
Support from payments made by CCC to wheat, oats, and barley producers pursuant to the Agricultural Act of 1949, as amended, consists of any deficiency, disaster and paid land diversion payments for that crop. Support is computed as the total amount of payments for wheat, oats or barley for that crop year made in cash, commodities and the total face value of any payments made in certificates.
2. CCC Storage Payments: Farmer-Owned Reserve Program and Special Producer Loan Storage Program
Under the Farmer-Owned Reserve (FOR) Program and Special Producer Loan Storage Program, CCC provides support by paying producers for storing their own commodities. Support from these programs for a crop year is the total amount of payments, computed for each month in the crop year in accordance with the following formula:
[ 1 x A x B ] + [ 1 x C x D ]
l2 l2
where:
A = the annual storage payment rate for wheat, oats or barley in the Farmer-Owned Reserve Program
B = the amount of wheat, oats or barley in the Farmer-Owned Reserve Program for that month
C = the annual storage payment rate for wheat, oats or barley in the Special Producer Loan Storage Program
D = the amount of wheat, oats or barley in the Special Producer Loan Storage Program for that month.
3. Conservation Reserve Program
The support provided for a crop year by the Conservation Reserve Program (CRP) is one-half of the total annual rental payments made pursuant to the CRP by CCC for acreage taken out of production for wheat, oats or barley.
4. Acreage Reduction Program
The support provided to producers of wheat, oats or barley is adjusted to take account of income foregone from reduced production as a result of the acreage reduction program. The support is reduced by the income foregone for a crop year, computed in accordance with the following formula:
(0.9 x A x B x C ) - ( 0.9 x A ) x ( D - E )
where:
A = acreage idled under the acreage reduction program
B = yield per acre on idled acreage in bushels
where:
B = [(G +0 .85 x A) x (H - 0.85 x A x J)] - F
I .
0.85 x A
and
F = total quantity produced in bushels
G = total acreage harvested
H = United States average yield per harvested acre in bushels per acre
I = 10 million for wheat and 1 million for barley or oats
J = 1.1 for wheat, 1 for barley, and 1.2 for oats
C = export price in dollars per bushel
where:
C = K - L
M
and
K = season average farm price in dollars per bushel
L = total value of Export Enhancement Program bonuses for wheat and wheat products, oats and oat products, or barley and barley products in dollars
M = total quantity of wheat, oats or barley exported as grain and the grain equivalent of wheat, oat or barley products exported in bushels
or
if L = 0, then C = K
D = national average variable cash expenses per acre as reported by the Economic Research Service in dollars
E = expenses incurred to maintain conserving uses, deemed to be $15 per acre for wheat and $20 per acre for barley and oats.
Support shall only be adjusted when the income foregone, computed in accordance with this formula, exceeds zero.
5. Certificate Premiums and Discounts
CCC generic certificates provide support in addition to the face value of the certificates to the extent that producers obtain a premium for the certificates in the market above their face value. In the same manner, support provided by certificates would be reduced to the extent that certificate values are discounted in the market. The support for a crop year is computed in accordance with the following formula:
A x (B - C)
where:
A = the weighted average premium or discount for the crop year
B = the total face value of generic certificates issued to wheat, oats or barley producers for the programs specified in paragraph A.1 for that crop year
C = the total face value of generic certificates returned to CCC by producers for cash.
For purposes of paragraph 5, the average monthly premium or discount shall be derived from the most representative survey available of premiums or discounts realized in the market and shall be weighted by the monthly value of total certificates exchanged for CCC commodities.
B. Other Support
6. CCC Loan Forfeiture Benefits
The forfeiture to CCC on a non-recourse basis of wheat, oats or barley, pledged as collateral for a commodity loan, provides support to the extent that the price paid by CCC for the grain exceeds the market price of that grain. Support for a crop year is computed by multiplying the quantity of grain forfeited by the difference between the season average farm price for the grain and the unit value of CCC collateral acquisitions of that grain.
7. Price Enhancing Aspects of Government Programs
Government acreage control programs, inventory actions, import tariffs on wheat, oats or barley, and export programs provide support to the extent that they enhance prices received by producers in the domestic market above the prices received on the world market. The price enhancing effect is measured by the difference between the season average farm price for the grain and the world price for that grain. The support for a crop year for wheat, oats or barley is computed in accordance with the following formula:
A x C
B
where:
A = total value of Export Enhancement Program (EEP) bonuses for wheat, oats or barley
B = volume of exports for wheat, oats or barley
C = volume of production for wheat, oats or barley.
For purposes of paragraph 7, EEP bonus means the face value of commodity certificates issued by CCC for export sales of wheat, oats or barley.
8. Advance Payments
Advance payments provide support to the extent that the government pays the interest costs on funds advanced. The total support provided for a crop year by advance payments made by CCC for wheat, oats or barley is computed for each month in accordance with the following formula:
A x B x C
l2
where:
A = advance payments made by CCC for wheat, oats or barley in a month
B = the CCC interest rate at the time the advance payments are made
C = the number of months that the payments precede the crop year for which they are made.
9. Crop Insurance Programs
The support provided through crop insurance programs is the difference between crop insurance payments made to producers under Federal Crop Insurance Programs for wheat, oats or barley for a crop year and premiums paid by producers in respect thereof. The amount of support may be a positive or negative number.
10. Government Service Programs For Agriculture
Government service programs consist of the Federal Grain Inspection Service (FGIS) weighing and inspection programs; Agricultural Research Service (ARS); Cooperative State Extension Service programs (CSES); irrigation programs under the Bureau of Reclamation (BR); Corps of Engineers (CE) inland waterway programs; conservation programs of the Soil Conservation Service (SCS) and the Agricultural Stabilization and Conservation Service (ASCS); the freight-related program expenditures and the freight-related low-interest loan program of the Federal Railway Administration (FRA); the cooperator programs of the Foreign Agricultural Service (FAS); the market news service, seed plant protection, and product standards and grading programs of the Agricultural Marketing Service (AMS); the plant disease and pest control programs of the Animal and Plant Health Inspection Service (APHIS); and projects for the promotion of wheat, oats or barley under the Targeted Export Assistance Program. Support provided for a crop year for wheat, oats or barley by these programs is determined as follows:
i) net expenditures in a fiscal year for the weighing and inspection programs of the Federal Grain Inspection Service, computed for wheat, oats or barley in accordance with the following formula:
A x B
C
where:
A = net expenditures by the Federal Grain Inspection Service for weighing and inspection programs
B = value of production of wheats, oats or barley
C = total value of production of all grains and oilseeds;
ii) net expenditures in a fiscal year by the Agricultural Research Service and the Cooperative State Extension Service, computed in accordance with the following formula:
A x B
C
where:
A = net expenditures for ARS and CSES
B = value of production of wheat, oats or barley
C = total value of agricultural production;
iii) net expenditures in a fiscal year by the Bureau of Reclamation for irrigation programs, computed in accordance with the following formula:
A x B
C
where:
A = net expenditures by the Bureau of Reclamation for irrigation programs
B = value of production of wheat, oats or barley using the irrigation programs
C = value of production of all crops using the irrigation programs;
iv) net expenditures in a fiscal year by the Corps of Engineers for the operation, maintenance and construction of inland waterways, computed in accordance with the following formula:
A x B
C
where:
A = net expenditures for the operation, maintenance and construction of inland waterways
B = ton-miles travelled on inland waterways by wheat, oats or barley
C = total ton-miles travelled by all commodities on inland waterways;
v) net expenditures in a fiscal year for conservation programs under the Soil Conservation Service and the Agricultural Stabilization and Conservation Service, computed for wheat, oats or barley in accordance with the following formula:
A x B
C
where:
A = net expenditures by the Agricultural Stabilization and Conservation Service and the Soil Conservation Service for conservation programs
B = value of production of wheat, oats or barley
C = total value of agricultural production;
vi) expenditures in a fiscal year by the Federal Railway Administration for freight-related programs, computed in accordance with the following formula:
A x B
C
where:
A = expenditures by the Federal Railway Administration for freight-related programs
B = ton-miles travelled by wheat, oats or barley on railways
C = the ton-miles travelled by all commodities on railways;
vii) support provided in a fiscal year for wheat, oats or barley by the Federal Railway Administration through low-interest loans for rail freight, computed in accordance with the following formula:
(A - B) x C
D
where:
A = the commercial lending rate
B = the interest rate charged by the Federal Railway Administration on loans for rail freight
C = ton-miles travelled by wheat, oats or barley on railways
D = ton-miles travelled by all commodities on railways;
viii) net expenditures in a fiscal year by the Foreign Agricultural Service (FAS), computed in accordance with the following formula:
A x B
C
where:
A = net expenditures for cooperator programs of FAS
B = value of production of wheat, oats or barley
C = total value of agricultural production;
ix) net expenditures in a fiscal year for the Agricultural Marketing Service computed in accordance with the following formula:
(A x B) + (D +E) x B
C F
where:
A = net expenditures for market news service
B = value of production for wheat, oats or barley
C = total value of agricultural production
D = net expenditures for seed plant protection
E = net expenditures for product standard and grading programs
F = total value of crop production;
x) net expenditures in a fiscal year for plant disease and pest control programs of the Animal and Plant Health Inspection Service (APHIS), computed for wheat, oats or barley in accordance with the following formula:
A x B
C
where:
A = net expenditures for the plant disease and pest control programs of the Animal and Plant Health Inspection Service
B = value of production of wheat, oats or barley
C = total value of agricultural production; and
xi) net expenditures in a fiscal year under the Targeted Export Assistance Program for projects promoting wheat, oats or barley.
11. CCC Commodity Loans
The support provided by CCC commodity loans, including regular loans, Farmer-Owned Reserve loans, and Special Producer Loan Storage Program loans, is the difference between the commercial rate of interest and the rate of interest paid by a producer. Support for a crop year is the total of the amounts computed in accordance with the following formula, for each loan:
i) for regular commodity loans, loans under the Special Producer Loan Storage Program and Farmer-Owned Reserve loans not exceeding 1 year:
(A - B) x (C x D)
where:
A = the rate of interest reported by agricultural banks for non-real estate loans
B = the interest rate charged by CCC
C = the value of the loan
D = the proportion of the year the loan is in effect;
ii) for Farmer-Owned Reserve loans exceeding 1 year:
A x B x C
where:
A = the rate of interest reported by agricultural banks for non-real estate loans
B = the value of the loan
C = the proportion of that crop year the loan is in effect; and
iii) the amount of interest forgiven by CCC in a crop year on CCC commodity loans for wheat, oats or barley, computed in accordance with the following formula:
A x B x C
where for each loan:
A = the CCC interest rate for the loan
B = value of the loan for which interest has been forgiven
C = the proportion of the crop year the loan was in effect.
12. State Budget Outlays
The support provided by state governments for a crop year is the agricultural expenditures by such governments for support programs for wheat, oats or barley, computed in accordance with the following formula:
(A - B) x C
D
where:
A = agricultural expenditures by state governments as compiled by the United States Bureau of the Census
B = transfers, if any, by the federal government for those expenditures
C = the value of production for wheat, oats or barley
D = the total value of agricultural production.
13. Farm Credit Programs
The support provided for a crop year by farm credit programs shall be included in the computation of the level of support. The Parties shall develop a mutually agreed methodology for computing such support by January 31, 1989.
C. Adjustments
The computation of the level of United States government support in this Annex shall reflect spending reductions resulting from a sequestration order pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985 or any other budget reduction provision.
Schedule 2
Canadian Government Support Programs
A. Direct Payments
1. Payments Made Pursuant to the Agricultural Stabilization Act
The support provided by the federal government pursuant to the Agricultural Stabilization Act is the total amount of payments to producers of wheat, oats or barley for that crop year.
2. Payments Made Pursuant to the Western Grain Stabilization Act
The support provided by the federal government is its share of the cost of financing the Western Grain Stabilization Program. The support is computed in accordance with the following formula:
[ A x C + B x D] x E
A + B A + B F
where:
A = the total amount of levy contributions made by the federal government to the Western Grain Stabilization Account in the five crop years ending in the crop year for which the computation is being made for all grains and oilseeds eligible for support under the Act
B = the total amount of levies paid by producers in the Western Grain Stabilization Account in the five crop years ending in the crop year for which the computation is being made for all grains and oilseeds eligible for support under the Act
C = the total amount of stabilization payments made pursuant to the Act , for all grains and oilseeds eligible for support under the Act, for the crop year for which the computation is being made
D = any government funds, other than levies, to make up any Western Grain Stabilization Account deficit incurred in that crop year
E = the value of marketings in that crop year of wheat, oats or barley eligible for support under the Act
F = total value of marketings in that crop year of all grains and oilseeds eligible for support under the Act.
3. Payments Pursuant to the Special Canadian Grains Program
The support provided by the federal government to producers of wheat, oats or barley through the Special Canadian Grains Program is the total amount paid to producers of such grain for the crop year.
4. Stabilization Payments Made by Provincial Governments
The support provided by provincial governments as stabilization payments is computed by subtracting producer levies from the total amount of payments made to producers of wheat, oats or barley for the crop year.
5. Income Foregone Adjustment
The support provided to producers of wheat, oats or barley is adjusted to take account of income foregone from reduced production, as a result of restrictive Canadian Wheat Board delivery quotas. The support is reduced by the income foregone for a crop year, computed in accordance with the following formula:
[(A - B - C) x D - E + F] x (G - 13) x H
I
where:
E = J - K - (G x F)
I
and where:
A = the Canadian Wheat Board final realized price, in-store Thunder Bay, for No.1 CWRS wheat, No.1 Feed oats or No. 1 Feed barley in dollars per tonne
B = the average freight rate for wheat, oats and barley paid by producers in Western Canada in dollars per tonne
C = the average elevation and handling tariffs in Western Canada for wheat, oats or barley in dollars per tonne
D = the average yields in Western Canada for wheat, oats or barley in tonnes per acre
E = variable cash expenses for wheat, oats or barley in dollars per acre
F = variable cash expenses of summerfallow, deemed to be $15 per acre
G = the summerfallow area in millions of acres
H = the areas planted to wheat, oats or barley in Western Canada in millions of acres
I = the total planted area in Western Canada of crops eligible for coverage under the Western Grain Stabilization Act in millions of acres
J = the gross grain expenses used to calculate payments pursuant to the Western Grain Stabilization Act, in millions of dollars
K = the non-variable cash expenses included in J (taxes, tools, building maintenance, utilities, insurance, interest and miscellaneous) in millions of dollars.
Support shall only be adjusted when the income foregone, computed in accordance with this formula, exceeds zero.
B. Other Support
6. Expenditures of the Canadian Grain Commission
The Canadian Grain Commission (Commission) provides grading and inspection services for grains and oilseeds. The support provided by the Commission is the net expenditures in a fiscal year by the Commission for wheat, oats or barley, computed in accordance with the following formula:
( A - B ) x C
D
where:
A = total expenditures by the Canadian Grain Commission for all grains and oilseeds
B = user fees paid for services performed by the Canadian Grain Commission for all grains and oilseeds
C = farm cash receipts for wheat, oats or barley
D = farm cash receipts for all grains and oilseeds.
7. Wheat Board Pool Deficit
The federal government provides support to the extent that initial payments made by the Canadian Wheat Board (CWB) to producers for wheat, oats or barley exceed net returns realized by the CWB in the market. This support is computed as follows:
i) for wheat:
1) where, at the end of the crop year, farm stocks of wheat in Western Canada exceed 1,128,000 tonnes, support is the amount paid to the Canadian Wheat Board for that crop year by the federal government pursuant to the Canadian Wheat Board Act to offset any deficit in pool accounts for wheat; or
2) where at the end of the crop year, farm stocks of wheat in Western Canada do not exceed 1,128,000 tonnes, the support provided by the federal goverment for wheat for that crop year is computed in accordance with the following formula:
A x (C - D + E)
B
where:
A = Canadian Wheat Board pool deficits for wheat for that crop year
B = volume of wheat delivered to the Canadian Wheat Board by eligible producers in that crop year
C = production of wheat in Western Canada in that crop year
D = farm stocks of wheat in Western Canada at the end of that crop year
E = farm stocks of wheat in Western Canada at the end of the previous crop year;
ii) for oats or barley: the amount paid to the Canadian Wheat Board for the crop year by the federal government pursuant to the Canadian Wheat Board Act to offset any deficit in pool accounts for oats or barley.
8. Domestic Wheat Pricing
Support is provided by the Domestic Wheat Pricing Policy to the extent that the domestic price for wheat exceeds the world market price. The support provided to producers of wheat by the Domestic Wheat Pricing Policy is computed in accordance with the following formula:
(A - B) x C
where:
A = the average domestic selling price for wheat milled in Canada for domestic human consumption
B = the average export price for wheat
C = the volume of wheat milled in Canada for domestic human consumption.
For purposes of this paragraph,
i) the average domestic selling price for wheat milled in Canada for domestic human consumption is computed in accordance with the following formula:
D - (0.5 x (E + F) )
where:
D = the average domestic selling price for a crop year for No. 1 Canada Western Red Spring (CWRS) wheat of 13.5% protein
E = the difference between the Canadian Wheat Board final realized prices for that crop year for No. 1 CWRS wheat of 13.5% protein and No. 1 CWRS wheat
F = the aggregate of E and the difference between the Canadian Wheat Board final realized prices for that crop year for No. 1 CWRS wheat and No. 2 CWRS wheat;
For purposes of this subparagraph, all prices are basis in-store Thunder Bay;
ii) the value of domestic sales is computed by multiplying the average domestic selling price for wheat milled in Canada for domestic human consumption by the volume of sales from the pool account for wheat;
iii) the value of export sales is computed by subtracting the value of sales for domestic human consumption from the value of total sales from the pool account for wheat; and
iv) the average export price is computed by dividing the total value of export sales for wheat by the total volume of export sales from the pool account for wheat.
9. Domestic Price Gap: Oats or Barley
Support is provided to producers of oats or barley to the extent that the domestic price for oats or barley exceeds the world market price for that grain. The support is computed in accordance with the following formula:
[D - (A - B - C)] x E
where:
A = the Canadian Wheat Board final realized prices for No. 1 Feed oats or No. 1 Feed barley, in store Thunder Bay
B = the average elevation and handling tariffs in Western Canada for oats or barley
C = the average freight rate paid by producers in Western Canada for oats or barley
D = the off-Board prices of oats or barley in the Prairies derived from Western Grain Stabilization Act data and published by the Canadian Grain Commission
E = the consumption in Western Canada of oats or barley for feed.
The amount computed in accordance with the formula is included in the computation of support only when it exceeds zero.
10. Advance Payments
Advance payments provide support to producers of wheat, oats or barley to the extent that the federal government pays interest costs on funds advanced to producers pursuant to the Prairie Grain Advance Payments Act. The support is computed in accordance with the following formula:
A x C
B
where:
A = value of advances made in the fiscal year for wheat, oats or barley
B = value of advances made in the fiscal year for all eligible crops
C = interest cost of the funds advanced in the fiscal year to producers for all eligible crops.
11. Crop Insurance
The amount of support provided through crop insurance is the difference between crop insurance payments made to producers for wheat, oats or barley for a crop year and crop insurance premiums paid by producers in respect thereof, computed as follows:
i) in the case of provinces other than Ontario, the total amount of crop insurance payments made for wheat, oats or barley less crop insurance premiums paid by producers in respect thereof;
ii) in the case of Ontario
1) for winter wheat, the total crop insurance payments for winter wheat less crop insurance premiums paid by producers for that crop.
For purposes of this subparagraph, any crop insurance payments made for winter wheat are to be attributed to the crop year in which the crop was harvested;
2) for spring wheat, oats or barley, the crop insurance payment for such grain, determined in accordance with the following formula:
( A - B ) x C
D
where:
A = total crop insurance payments for spring wheat, oats, barley, spring rye and mixed grains
B = total crop insurance premiums paid by producers for spring wheat, oats, barley, spring rye and mixed grains
C = total area in Ontario planted to spring wheat, oats or barley
D = total area in Ontario planted to spring wheat, oats, barley, spring rye and mixed grains.
The amount of support provided through crop insurance may be a positive or negative number.
12. Western Grain Transportation Act
The federal government through the Western Grain Transportation Act provides support for the rail transportation of wheat, oats or barley produced in Western Canada by sharing the cost of transportation of such grain. The support provided pursuant to the Act to wheat, oats or barley producers is computed as follows:
where, at the end of the crop year,
i) farm stocks in Western Canada exceed 1,128,000 tonnes for wheat, 950,000 tonnes for barley or 500,000 tonnes for oats, the government support provided under the Act for wheat, oats or barley is computed by multiplying the shipments in a crop year of wheat, oats or barley which are eligible for statutory rates under the Act by the government share of the average cost per tonne of moving wheat, oats or barley for that crop year, as determined by the Canadian Transportation Commission or its successors prior to the start of that crop year pursuant to Part II of the Act; or
ii) farm stocks in Western Canada do not exceed 1,128,000 tonnes for wheat, 950,000 tonnes for barley or 500,000 tonnes for oats, government support provided for that crop year under the Act for wheat, oats or barley is computed in accordance with the following formula:
A x (B - C + D)
where:
A = the government share of the average cost per tonne of moving wheat, oats or barley, for that crop year, as determined by the Canadian Transportation Commission or its successor, prior to the start of that crop year pursuant to Part II of the Act
B = production of wheat, oats or barley in Western Canada in that crop year
C = farm stocks of wheat, oats or barley in Western Canada at the end of that crop year
D = farm stocks of wheat, oats or barley in Western Canada at the end of the previous crop year.
13. Prairie Branch Line Rehabilitation Program
The federal government provides support through the Prairie Branch Line Rehabilitation Program by paying for the rehabilitation of rail lines and for the purchase of rail cars in Western Canada. The support provided in a fiscal year for wheat, oats or barley is computed in accordance with the following formula:
A x [(C x B) + E + F]
B D
where:
A = total annual shipments of wheat, oats or barley on the rehabilitated branch lines
B = total annual shipments of all grains and oilseeds on the rehabilitated branch lines
C = expenditures made under the Prairie Branch Line Rehabilitation Program during the fiscal year
D = total annual tonnage shipped over the rehabilitated branch lines
E = expenditures during the fiscal year by the federal government for the purchase or lease of hopper cars intended for the transport of grains and oilseeds
F = expenditures during the fiscal year by the federal government for the rehabilitation of boxcars intended for the transport of grains and oilseeds.
14. Research Expenditures
The support provided by the federal government for research for wheat, oats or barley is the research expenditure made in a fiscal year for that grain, or where otherwise not ascertainable, the amount computed in accordance with the following formula:
A x C
B
where:
A = farm cash receipts for wheat, oats or barley
B = total farm cash receipts
C = the aggregate of expenditures of the Research Branch of Agriculture Canada, the New Crop Development Program, the agriculture share of the Industrial Research Program and federal contributions to the Biotechnology Institute.
15. General Support Programs of the Federal Government
The Prairie Farm Rehabilitation Act, the Agriculture and Rural Development Act (ARDA), and the Economic and Rural Development Agreements (ERDA) provide general support to producers of wheat, oats or barley. The support is the expenditures by the federal government under the Prairie Farm Rehabilitation Act , ARDA and ERDA in a fiscal year for wheat, oats or barley, computed in accordance with the following formula:
A x B
C
where:
A = the expenditure under the program
B = farm cash receipts for wheat, oats or barley
C = total farm cash receipts.
16. General Provincial Government Expenditures for Agriculture
The support provided for a crop year by each provincial department or ministry responsible for agriculture is the net expenditure for wheat, oats or barley or, where otherwise not ascertainable, the amount computed in accordance with the following formula:
(A x 0.926) x B
C
where:
A = expenditures for agricultural purposes by the provincial department or ministry responsible for agriculture in that province less all crop insurance and crop stabilization payments
B = farm cash receipts for wheat, oats or barley in that province
C = total farm cash receipts in that province.
For purposes of this paragraph, the ministry or department responsible for agriculture means:
1) in Newfoundland, the Department of Rural, Agricultural and Northern Development
2) in Prince Edward Island, the Department of Agriculture
3) in Nova Scotia, the Department of Agriculture and Marketing
4) in New Brunswick, the Department of Agriculture
5) in Ontario, the Ministry of Agriculture and Food
6) in Manitoba, the Department of Agriculture
7) in Saskatchewan, the Department of Agriculture
8) in Alberta, the Department of Agriculture
9) in British Columbia, the Ministry of Agriculture and Fisheries
10) in Quebec, the Ministry of Agriculture, Fisheries and Food.
17. Farm Credit Programs
Support provided for a crop year by farm credit programs shall be included in the computation of the level of support. The Parties shall develop a methodology for computing such support by January 31, 1989.
C. Definitions
For purposes of this Schedule:
Eastern Canada means the provinces of Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland.
farm cash receipts means receipts derived from the sale of products excluding direct government payments associated with such sales.
grains and oilseeds means wheat, oats, barley, canola, flaxseed, rye, mustard seed, grain corn, soybeans, mixed grain, buckwheat, sunflower seed, peas and beans.
the producer price of barley is computed as the price per tonne realized by the Canadian Wheat Board, basis in-store Thunder Bay, for No. 1 Feed barley less the aggregate of:
a) the average per tonne elevation and handling tariffs paid by producers in Western Canada; and
b) the average per tonne transportation charges paid by producers in Western Canada.
the producer price of oats is computed as the price per tonne realized by the Canadian Wheat Board, basis in-store Thunder Bay, for No. 1 Feed oats less the aggregate of:
a) the average per tonne elevation and handling tariffs paid by producers in Western Canada; and
b) the average per tonne transportation charges paid by producers in Western Canada.
the producer price of wheat is computed as the price per tonne realized by the Canadian Wheat Board, basis in-store Thunder Bay, for No. 1 Canada Western Red Spring Wheat less the aggregate of:
a) the average per tonne elevation and handling tariffs paid by producers in Western Canada; and
b) the average per tonne transportation charges paid by producers in Western Canada.
value of production means the level of production for wheat, oats or barley multiplied by the producer price for any such grain.
Western Canada means the provinces of Manitoba, Saskatchewan, Alberta, and British Columbia.
Annex 706
Market Access for Poultry
1. For purposes of Article 706:
a) chicken and chicken products means chicken and chicken capons, live or eviscerated, chicken parts, whether breaded or battered, and chicken products manufactured wholly thereof, whether breaded or battered;
b) turkey and turkey products means turkey, live or eviscerated, turkey parts, whether breaded or battered, and turkey products manufactured wholly thereof, whether breaded or battered.
2. Without limiting the generality of subparagraph 1(a), chicken and chicken products does not include chicken cordon bleu, breaded breast of chicken cordon bleu, chicken Kiev, breaded breast of chicken Kiev, boneless Rock Cornish with rice, stuffed Rock Cornish, boneless chicken with apples and almonds, chicken Romanoff Regell, chicken Neptune breast, boneless chicken Panache, chicken TV dinners, old roosters, and "spent fowl" commonly called "stewing hen".
3. Without limiting the generality of subparagraph 1(b), turkey and turkey products does not include turkey cordon bleu, breaded breast of turkey cordon bleu, turkey Kiev, breaded breast of turkey Kiev, boneless turkey with apples and almonds, turkey Romanoff Regell, turkey Neptune breast, boneless turkey Panache, and turkey TV dinners.
Annex 708.1
Technical Regulations and Standards for Agricultural, Food, Beverage and Certain Related Goods
For purposes of the Schedules contained in this Annex:
feed means a product intended for consumption by animals, including a medicated feed, but not a product regulated by either Party as a veterinary drug;
fertilizer means any good supplying nutrients for plant growth; soil and plant amendments; agricultural liming and acidifying agents and mixtures of fertilizers and pesticides;
means of conveyance means any material, equipment, carrier, container, article or other thing that may contain or carry a plant pest;
pest, for purposes of Schedule 7 only,
means any injurious, noxious or troublesome insect, fungus, bacterial organism, virus, weed, rodent or other plant or animal pest, and includes any injurious, noxious or troublesome organic function of a plant or animal;pesticide, for purposes of Schedule 7 only, means any product, device, organism or substance manufactured, represented or sold to control or mitigate actions of any pest;
plant means any plant or part thereof, plant material and plant product;
plant pest means any form of plant or animal life or any pathogenic agent, injurious or potentially injurious to plants; and
veterinary drug means any substance applied or administered to an animal, whether for therapeutic, prophylactic, or diagnostic purposes, or for the modification of physiological functions or behavior, but excluding veterinary biologics such as vaccines, bacterins, antisera or toxoids and analogous products.
SCHEDULE 1: Feeds
1. For purposes of this Schedule, technical regulations do not include grading requirements.
2. The Parties shall, with respect to feeds:
a) work toward the harmonization or equivalence of federal government requirements for:
i) labelling, content guarantees, testing requirements, and exemptions from specified regulations, and
ii) source, type, level, directions for use, withdrawal times, compatibility, cautions and warnings for additives and drugs that are allowed in feeds;
b) work, through the National Association of State Departments of Agriculture and the Association of American Feed Control Officials, or any successor entities, toward the harmonization or equivalence of Canadian federal and United States federal and state requirements with respect to labelling, content guarantees, packaging, testing requirements, tonnage fees, registration and exemptions from specified regulations;
c) adopt procedures to exchange, and grant reciprocal recognition of, feed mill inspection results;
d) work toward the establishment of equivalent manufacturing practice regulations for medicated feeds;
e) work toward the harmonization of procedures to validate feed assay methods for measuring drugs, additives and contaminants in feeds; and
f) work toward the harmonization of tolerances and action levels of contaminants and drug residues in feeds.
SCHEDULE 2: Fertilizers
The Parties shall, with respect to fertilizers:
a) work toward equivalent federal government requirements for:
i) labelling, content guarantees, testing requirements, and exemptions from specified regulations for soil and plant amendments, and
ii) source, type, level, directions for use, withdrawal times, compatibility, cautions and warnings for pesticides
b) work, through the National Association of State Departments of Agriculture, the Association of American Plant Food Control Officials, or any successor entities, toward the harmonization or equivalence of Canadian federal and United States state requirements for registration, labelling, content guarantees, packaging, tonnage fees and exemptions from specified regulations;
c) work toward the adoption of procedures to harmonize sampling and analytical test methods (such as those adopted by the Association of Official Analytical Chemists) for determining the guarantees with respect to content and contaminants; and
d) work toward harmonizing tolerances and action levels.
SCHEDULE 3: Seeds
The Parties shall, with respect to seeds:
a) not maintain or introduce origin-staining requirements for alfalfa or clover seed originating in the territory of the other Party;
b) work, through the National Association of State Departments of Agriculture and the American Association of Seed Control Officials, or any successor entities, toward allowing seeds grown in the territory of Canada and imported into the United States of America to be governed by uniform regulatory requirements within the United States of America; and
c) maintain mutual recognition of variety certification standards and procedures, and seed testing methods and procedures, established by members of the Association of Seed Certifying Agencies and the Association of Official Seed Analysts or any successor entities.
SCHEDULE 4: Animal Health
1. The Parties shall, with respect to animal health:
a) make equivalent and, where equivalent, accept the equivalence of, export certifications issued by private veterinarians accredited by the federal governments of either Party;
b) exchange test protocols and reagents to assist in the harmonization of test methods;
c) work toward equivalent technical regulations, testing and certification procedures for veterinary biologics;
d) work toward equivalent and, where possible, harmonized animal disease test methods and procedures for animal disease control, eradication and certification;
e) work toward procedures and conditions for the importation of animals, including embryos, without disease testing or with minimal testing and certification, when the territory of, or a region within, the exporting Party attains an agreed acceptable status for specified diseases;
f) work toward the development of procedures and conditions to reduce the embargo period following eradication of outbreaks of foot and mouth disease, rinderpest, or other diseases exotic to Canada and the United States of America;
g) work toward an agreement delineating the criteria for recognizing that a region is free from specified diseases;
h) maintain a current agenda of animal health issues and develop a specific timetable for their resolution; and
i) work toward eliminating state and provincial restrictions related to the importation of animals, including embryos, animal products and by-products.
2. In accordance with procedures and conditions to be agreed, the United States of America shall not prohibit the importation of animals, including embryos, and animal products, from Canadian regions because of foot and mouth disease or rinderpest, when:
a) the Parties have negotiated an agreement in accordance with subparagraph 1(g) of this Schedule; and
b) Canada has certified that those regions are free of foot and mouth disease or rinderpest.
3. In accordance with procedures and conditions to be agreed, Canada shall permit the direct importation, without quarantine, of:
a) in the case of bluetongue, United States breeding cattle based on a single test from states where an effective insect vector does not exist and from a group of states during a specified vector-free winter period; and
b) in the case of pseudorabies, live swine from the United States of America for immediate slaughter.
SCHEDULE 5: Veterinary Drugs
1. The Parties recognize that:
a) veterinary drugs should be safe for the target animal;
b) veterinary drugs should be effective for their intended use; and
c) in the case of veterinary drugs for food-producing animals, the residue of the drug remaining in the edible product of the animal should be safe for animal and human consumption.
2. The Parties shall, with respect to veterinary drugs:
a) make equivalent and, where equivalent, accept the equivalence of, health and safety regulatory requirements, definitions, claims, warning and caution statements, procedures for establishing tolerances, methods of risk assessment and investigational new veterinary drug requirements within twenty-four months of entry into force of this Agreement;
b) examine published tolerances for veterinary drug residues in food and classify them into those tolerances that are harmonized and those that are different;
c) adopt, where both Parties agree to their use, CODEX standards on residues of veterinary drugs in foods;
d) make equivalent and, where equivalent, accept the equivalence of, pharmaceutical assay methods, drug residue screening, and food monitoring assay methods;
e) make equivalent and, where equivalent, accept the equivalence of, emergency drug use authorizations and veterinary prescriptions for the medication of feeds;
f) adopt procedures to harmonize tissue assay methods within twelve months of entry into force of this Agreement; and
g) work toward developing a minimum threshold for compounds that do not have a published tolerance, for purposes of removing from regulation such compounds found in food at levels below that threshold. This policy will only apply to compounds where there is no indication that the substance is a carcinogen.
SCHEDULE 6: Plant Health
1. The Parties shall, with respect to plant health:
a) work toward equivalent and, where possible, harmonized quarantine procedures for plants that are produced or grown in the territories of both Parties;
b) work toward equivalent and, where possible, harmonized regulations regarding the importation of plants, particularly from third countries;
c)
work toward an agreement on the qualifications to be met by accredited plant health inspectors of either Party who issue phytosanitary certificates for shipments between the Parties. Once the Parties so agree, any such inspector shall be required to meet the agreed qualifications and each Party shall accept certificates issued by those inspectors; andd) notify the other Party, as soon as possible, of action taken within their respective territories to monitor and control plant pests or the importation of plants, whether from the other Party or from a third country.
2. When a plant capable of carrying a plant pest is produced or grown in the territory of one Party but not in that of the other, the non-producing or non-growing Party shall:
a) inform the public of the dangers of unauthorized transborder movement of such plants and of the necessity to control the export of these plants and means of conveyance into the territory of the producing or growing Party; and
b) provide such controls on, and phytosanitary certification of, such plants by inspectors accredited by the federal government of either Party, as are required to protect the health of plants in the producing or growing Party.
SCHEDULE 7: Pesticides
The Parties shall, with respect to pesticides:
a) exchange analytical residue methodology and provide crop residue data for the use, including minor uses, of pesticides;
b) cooperate regarding regulatory reviews of data on registered older chemicals;
c) work toward equivalent guidelines, technical regulations, standards and test methods;
d) work toward equivalent residue monitoring programs;
e) work toward equivalent technical regulations, standards or certifications for those pesticides selected by the Parties; and
f) work toward equivalence in:
i) the process for risk-benefit assessment,
ii) tolerance setting, and
iii) the setting of regulatory policies with respect to onco-genic pesticides.
SCHEDULE 8: Food, Beverage and Colour Additives
The Parties shall, with respect to food, beverage and colour additives, work toward the development of:
a) a uniform policy, with respect to compounds that migrate to foods and beverages, for removing those compounds from regulation where found below certain thresholds; and
b) uniform methods of risk assessment and health hazard evaluation systems.
SCHEDULE 9: Packaging and Labelling of Agricultural,
Food, Beverage and Certain Related Goods for Human Consumption
1. The Parties shall, with respect to packaging and labelling of agricultural, food, beverage and certain related goods for human consumption:
a) work toward the acceptance of dual declarations of content where the net quantity can be expressed in metric and United States units of measure, regardless of the order of the declaration;
b) work toward equivalent requirements for matters such as:
i) nutrition labelling,
ii) ingredient listing or declaration,
iii) labelling terminology and definitions,
iv) grading declarations; and
c) review container sizes, including can sizes.
2. The Parties shall accept the use of the terms "canola oil" and "low erucic acid rapeseed oil" as synonymous. Canola oil means the oil extracted from canola seed, which oil contains less than two percent erucic acid.
SCHEDULE 10: Meat, Poultry and Egg Inspection
1. The Parties shall work toward making equivalent and, where equivalent, accepting the equivalence of:
a) each other's reviews of mutually recognized meat and poultry inspection systems and facilities of third countries;
b) each other's internal review systems with respect to meat, poultry, egg and egg product inspection;
c) each other's meat, poultry, egg and egg product inspection systems;
d) each other's laboratory system procedures, and the results from each other's federally accredited and approved laboratories with respect to meat and poultry; and
e) specific testing methods and procedures with respect to eggs and egg products.
2. Consistent with paragraph 3 of Article 708, where:
a) the Parties have harmonized or accepted the equivalence of each other's inspection systems or certification procedures for meat, poultry, or eggs, and
b) the exporting Party has, pursuant to such systems or procedures, determined or certified that such meat, poultry, or eggs meet the standards or technical regulations of the importing Party,
the importing Party may examine such goods imported from the territory of the exporting Party only to ensure that (b) has occurred. This provision shall not preclude spot checks or similar verifying measures necessary to ensure compliance with the importing Party's standards or technical regulations provided that such spot checks or similar verifying measures, including any conducted at the border and including any unloading requirement, are conducted no more frequently than those conducted by the importing Party, under similar circumstances, with respect to its goods.
SCHEDULE 11: Dairy, Fruit and Vegetable Inspection
The Parties shall:
a) make equivalent and, where equivalent, accept the equivalence of, each Party's inspection systems for fresh fruits and vegetables;
b) work toward equivalent inspection systems for dairy products; and
c) make equivalent and, where equivalent, accept the equivalence of, laboratory system results from each other's federally accredited or approved laboratories for dairy inspection.
SCHEDULE 12: Unavoidable Contaminants in Foods and Beverages
The Parties shall, with respect to unavoidable contaminants in foods and beverages, work toward:
a) harmonizing their regulatory requirements;
b) making equivalent test methods used to determine acceptable levels of contaminants in foods and beverages;
c) harmonizing the process for setting tolerance or action levels for unavoidable contaminants through the following procedures:
i) determining to what extent the contaminant is unavoidable,
ii) determining the toxicity of the contaminant,
iii) estimating the likely exposure for humans,
iv) using risk assessment to establish an action level or tolerance, and
v) determining the extent to which analytical methods are available to measure contaminants in foods and beverages; and
d) developing uniform methods of assessing risk and evaluating health hazards.