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Minister Ritz Responds to U.S. Department of Agriculture Ruling on Mandatory Country-of-Origin Labeling

July 30, 2008

OTTAWA, ONTARIO–(Marketwire – July 30, 2008) – Federal Agriculture Minister Gerry Ritz today responded to the U.S. Department of Agriculture (USDA) recently published rule regarding the implementation of the mandatory country-of-origin labeling (COOL).

“The Government of Canada is disappointed with the U.S. COOL legislation, and remains concerned that it may discriminate against Canadian products,” said Minister Ritz. “We will analyze the recently released rule to determine the economic impacts on integrated North American markets”.

The U.S. Congress passed the Food, Conservation and Energy Act of 2008 (the 2008 U.S. Farm Bill) in June. This legislation requires the mandatory COOL rule for beef, lamb, pork, chicken and goat meat, along with perishable agricultural commodities, peanuts, pecans, ginseng and macadamia nuts, to be implemented by September 30, 2008.

The implementation of the COOL rule for food products has happened in stages. Implementation for fish and shellfish was effective April 4, 2005. However, implementation for all other commodities was delayed until September 2008.

Since the Canada-U.S. Free Trade Agreement, and then the North American Free Trade Agreement, trade between Canada and the U.S. has tripled. Eliminating obstacles to trade has contributed to mutually- beneficial supply chains, making both countries more competitive domestically and internationally. The Government of Canada understands that this new rule could have an impact on highly integrated sectors like the beef and pork sectors.

“The Government of Canada will continue to work with industry and the provinces and territories to minimize any impact on Canadian farmers and ranchers,” said Minister Ritz. “Should the implementation of the rule result in undue restrictions on the exportation of any products or animal from Canada, the Government will have to consider its options.”

As it did in 2003, 2005 and 2007, the Government of Canada will submit comments to the U.S. Federal Register, outlining its views on the rule.

BACKGROUNDER

On October 30, 2003, the U.S. Department of Agriculture (USDA), Agricultural Marketing Service, published a rule regarding the implementation of the mandatory country-of-origin labeling (COOL) of beef, lamb, pork, fish, perishable agricultural commodities and peanuts, as provided in the Farm Security and Rural Investment Act of 2002 (2002 Farm Bill).

Implementation for fish and shellfish took effect on April 4, 2005. However, implementation for all other commodities was delayed, through the Appropriations process, until September 2008.

The final version of the Bill that was passed by the US Congress in June 2008 includes a legislative amendment, or “fix”, for the mandatory COOL of beef, lamb, pork, fish, and other perishable agricultural commodities, that is currently scheduled to be implemented by September 30, 2008. The final version of COOL adds meat from goats, chickens, ginseng, macadamia nuts, and pecans.

The rule does not cover processed foods, foods sold by the food services industry and products sold at retail establishments that have less than $230,000 in annual sales of fruits and vegetables.

For Canada, “Product of Canada” and “Made in Canada” claims on food labels are not the same as country-of-origin labeling requirements. First, these are voluntary – manufacturers or retailers are not obliged to use the claims. Second, under these guidelines, the claims provide consumers with information on the Canadian content of foods they buy, not the identification of every country where a stage of production has taken place.

Efforts are being made to ensure that the COOL guidelines remain consistent with the United States’ trade obligations and existing international standards. The Government of Canada remains concerned that the legislation might still result in discrimination against Canadian products, and will analyze the recently released rule to determine the impact to Canadian products. The Government of Canada will submit comments to the U.S. Federal Register by September 30, 2008. The Register is the official daily publication for rules, proposed rules, and notices of U.S. Federal agencies and organizations. The comments will be developed in full consultation with provinces, territories and industry.

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