March, 2006 Edition

                                          What's Happening at the FCC

Protecting Sensitive Areas

FCC met in February with DFO Policy, Fisheries Management, Oceans, and Science to express disappointment in the lack of substantive progress in DFO towards finalizing a DFO policy on protecting highly sensitive benthic marine ecosystems vis à vis fishing activity. FCC started discussions with DFO on this initiative in November 2004. Without a firm, reasoned, science-based departmental policy, the calls for bans and “freeze the footprint” approaches continue to gain momentum. In conclusion, DFO undertook to tabling at least draft documents on sensitive areas and exploratory fishing in data poor areas prior to the FCC Board of Directors meeting, tentatively schedule for late April.

Cooked & Peeled Shrimp – St. Pierre & Miquelon (SPM)

FCC organized an industry meeting in February in St. John’s with officials from SPM regarding tariff free access to the EU market through SPM. As a Territory of France, SPM can negotiate special access arrangements to the EU with the support of France. The high value of the EURO has virtually wiped out SPM’s exports to the US market. SPM’s shipping and port facilities as well as cold storage facilities are vastly underutilize. They need to increase utilization in order to decrease EU/French subsidies to more sustainable levels.

SPM will be meeting in March with EU and French officials regarding duty-free access for 6,000mt of Canadian cooked & peeled shrimp - 5,000mt transhipped; 1,000mt rebagged/ glazed in SPM.

Byrd Amendment

The World Trade Organization (WTO) found the US “Byrd Amendment”, which directed countervail/dumping duties to the injured industry, contravened WTO/GATT trade rules. The concern was that such a system provided an unjustified incentive for US industries to launch countervail/anti-dumping challenges – often leading to frivolous challenges but expensive defence costs for the foreign exporting industry. The recent US West Coast challenge against Canadian cooked & peeled shrimp is a good example where it cost the Canadian industry $100,000 (US) to get the petition defeated at preliminary review.

When the US refused to appeal the “Byrd Amendment”, Canada, the EU, and other countries introduced retaliatory measures against the import of specific US products. Canada introduced a 15% import surcharge on a number of goods including US oysters and selected seafood items.

In February, the US Congress repealed the Amendment and President Bush signed the repeal into law. However, there is a two-year phase out of the regime regarding current issues (e.g. soft wood lumber.) As such, it can be argued that the US repeal is not yet fully compliant with the WTO ruling. Nevertheless, the 15% surcharge on US oyster and other seafood goods expires April 30th. However, because of the two-year phase-out on current issues, the Department of Finance will be embarking on consultations on what, if anything, should be imposed after April 30th. The FCC has advised that the strategy has worked – the Amendment has been repealed, the phase-out wrinkle doesn’t affect fisheries, and, as such, the current surcharges should be allowed to lapse and no new measures introduced on US imports of fish and seafood. The US fish industry, through the NFI, worked to get the Byrd Amendment repealed.

Marine Biodiversity

The FCC represented the International Coalition of Fisheries Associations (ICFA) at the recent United Nations meeting on marine biodiversity. Main ICFA interventions were:

- regional fisheries organizations such as NAFO are appropriately focused on fisheries management. As such, ICFA cautioned against moves to expand their mandates into areas of multipurpose MPAs.

Fishing License as Property

The Nova Scotia Supreme Court recently ruled that a fishing license is a form of personal property and, as such, a receiver/trustee can require a bankrupt fishing enterprise to transfer the license as part of the bankruptcy proceedings. As well, the license can be a charge under a general security agreement. This is regarded as a welcomed decision for those involved in financing in the fishing industry as it has the potential of creating some clarity in an area where there has been a great deal of conflicting jurisprudence.

It appears the decision will be appealed. If appealed, the FCC is considering seeking intervener status in the proceedings.

Key Meetings – March

Can-Trace, Toronto.

FCC is on the Can-Trace steering committee regarding the development of traceability models for food sectors. The meeting hopes to approve final models for fish & seafood, poultry, etc. as well as determine, what, if any, further work is required.

Boston Seafood Show, Boston

FCC is working with DFO and the Boston Consulate regarding an industry roundtable breakfast meeting with Fisheries Minister Hearn and an industry/provincial/federal fisheries ministers’ luncheon.

Agriculture & Agri-Food Seafood Roundtable, Ottawa

Meeting will (i) review Canadian competitiveness for selected species (lobsters, farmed salmon, mussels, sea urchin, sockeye salmon; (ii) review the “Brand Canada” initiative; and (iii) consider whether the Roundtable should assume a trade policy role now that International Trade Canada’s SAGITs have been disbanded.

International Fisheries

EU Cuts Quotas Further for 2006

Some key quota decisions for 2006 are:

Species      2005 TAC (mt)          2006 TAC (mt)            % Change
Cod                        36,371                       31,226                 - 14
Herring                 634,900                      548,901                - 14
Haddock*              87,322                        63,032                - 28
Saithe/Pollock       165,818                      140,775                - 15
Lobsters/Scampi     53,594                        67,320                + 26
Note. * North Sea haddock TAC was cut substantially as part of a move to protect cod even though the stock is high.

Market Issues

Germans Stay Committed to Frozen Fish



International Trade Canada Trade Show Program

Brussels Seafood Show, May 9-11, 2006

The Embassy is organizing visits to retail stores, the Ostende Fish Auction, industry roundtable meeting with our Trade Commissioners posted in Europe, one-on–one meetings with the Trade Commissioners; and reception at the Canadian pavilion. If interested contact richard.stead@international.gc.ca

Seafood Russia, June 6-8, 2006

The Embassy is organizing a Canada Booth at the show. The all inclusive fee for exhibiting in the Canada Booth is $1,250. If interested contact Manon Meloche, Agriculture & Agri-Food Canada, in Ottawa at 613-759-6696.

Taipei International Food Show, June 21-24

The Canadian trade Office in Taipei will have a Canadian pavilion at the show. A single furnished booth costs $2,200. If interested, contact karen.huang@international.gc.ca.

Japan’s Herring Roe Supply Trend

The overall supply of herring roe from all sources in 2005 was 13% higher than the previous year. While there was some variation in the landings of roe-herring in the various fisheries, the largest increase was seen in the supply of herring roe from the eastern Canadian fishery last year -- 3,950 tons in 2005, up from 2,750 tons in 2004. And this made up most of the increased production for the year.



Japan Fisheries Imports 2005/2004