Agriculture committee  Perhaps I can add something to that. What we'll be looking at in almost every case is where the product was actually produced. If we're looking at New Zealand, it was actually produced in New Zealand, and produced from raw milk in New Zealand. There are very few cases where we would see a lot of trade that it would be raw milk in one country that would go to another country and be processed.

Agriculture committee  The minister created this dairy working group back in the early spring. The reaction we were getting very early on in that process, including from dairy producers, was that article XXVIII isn't necessarily the best approach to deal with the issues. We were trying to develop a process where producers and processors and the government could each look at this issue and try to come up with longer-term approaches that would be less disruptive in other ways.

Agriculture committee  Part of the issue that we have been dealing with is that we really weren't sure where it was classified for quite some time. There was a ruling by the Canadian International Trade Tribunal that indicated we should be classifying it under a category that we were not anticipating we should be classifying it under.

Agriculture committee  Certainly that is an issue that's part of the context of the negotiations. We're not dealing directly with health and sanitary issues in the negotiations. It was decided that we wouldn't address those issues this time around. But clearly in our approach to the negotiations, competitiveness and those kinds of issues are front of mind.

Agriculture committee  I would say that it's actually quite different from commodity to commodity. Because of the nature of supply management, our supply-managed commodities are in a situation that is different from some of our other commodities; most of the rest of our commodities are quite capable of competing on the world stage in other markets.

Agriculture committee  When it comes to things like standards and health and sanitary requirements--Debra may want to speak to this more--clearly those are very important in terms of whether we get real access or not. At the WTO we can negotiate the tariffs and the conditions at the border, but even if you remove the tariffs and get through that, you might still face, as we frequently do, some kind of sanitary or health barrier that is going to block your access.

Agriculture committee  This has been a long-standing view, all along the way, since article XXVIII discussions have been—

Agriculture committee  We're still going through some of the statistics to determine exactly what the milk protein concentrates out of that category are and what the other products in that category are, including soy protein and all kinds of different things. Once we get that kind of information isolated we'll be able to tell whether there has been an explosion or a skyrocket, as you mention.

Agriculture committee  On the issue of caseins and caseinates, we've actually seen very low imports of these products over the last little while, so it hasn't been one of the more important issues in front of us. When there was discussion about butter oil/sugar blends in the past, there was no article XXVIII action taken.

Agriculture committee  As I think members of the committee are aware, this issue of a potential article XXVIII has been on the table in various forms for a number of years. We have been consistently provided with legal advice that we would not be able to apply the results of an article XXVIII against the U.S.

Agriculture committee  That issue was discussed extensively in various different places.

Agriculture committee  Well, first of all, I think the industry has had a different view on that issue. They think we should be able to apply the results of an article XXVIII against the U.S., and they have some of their own legal advice that supports that, so they've maintained that view. There have also been discussions about the possibility of having a separate negotiation with the U.S. to try to address the issue, and they have at some times suggested that might be an avenue to follow.

Agriculture committee  Thank you again, Mr. Chairman. Thanks for the opportunity to appear before you to discuss the initiatives recently announced by the government with respect to milk protein concentrates. Just to very briefly recap, on February 3, Minister Strahl announced that the government will be initiating negotiations under article XXVIII of the General Agreement on Tariffs and Trade to restrict imports of milk protein concentrates in response to dairy industry concerns about the increasing use of these concentrates in making cheese and other dairy products.

Agriculture committee  The WTO negotiations and bilateral negotiations are fundamentally different. In a bilateral negotiation, you can't address domestic subsidies. You can't address export subsidies in any meaningful sense, particularly in relation to the U.S. and Europe, where most of the problems originate.

Agriculture committee  A lot of us are certainly concerned about the U.S. and Europe talking and trying to narrow the gaps between them. We realize it's necessary and we want them to do it, but at the same time, we're concerned about what they might come up with. Unlike the last round, though, I don't think there's a possibility for the U.S. and Europe to agree on something and then simply impose it on the rest of the membership.