Heating Boilers Made in Canada, CBP Rules

(World Trade Interactive)

U.S. Customs and Border Protection has issued a final determination concerning the country of origin of certain heating boilers that may be offered to the U.S. government under an undesignated government procurement contract. CBP issues country of origin advisory rulings and final determinations as to whether an article is or would be a product of a designated country or instrumentality for the purposes of granting waivers of certain “Buy American” restrictions in U.S. law or practice for products offered for sale to the U.S. government. Read more here.

Champagne And Cheese Could Bring Down Anti-Piracy Talks

(European Voice)

Karel De Gucht, the European trade commissioner, has declared his readiness to walk away from international talks on an anti-counterfeiting pact if it does not include the EU’s list of protected products such as champagne and Parma ham.

De Gucht told MEPs during a debate on Wednesday (8 September) on the Anti-Counterfeiting Trade Agreement (ACTA) that the EU had to have the so-called geographic indicators (GI) included in the final deal.

The United States is blocking the EU’s request to include GIs in the accord and De Gucht said negotiations on the issue during the last round of talks in Washington, DC, last month were “disappointing”. The issue is threatening to become the main stumbling-block to completing a deal. Read more here.

Related: Talks On Anti-Counterfeiting Agreement Must Be More Transparent, Say Meps (European Parliament)

U.S.-EU Food Fight Dogs Anti-Counterfeiting Talks

(Reuters – Doug Palmer)

A long-running battle over the right to use European place names, like Parma or Roquefort, for some of the world’s most popular foods and beverages looks to be the toughest remaining issue in international trade talks aimed at reducing copyright and trademark theft.

The 27-nations of the European Union want the proposed Anti-Counterfeiting Trade Agreement (ACTA) to cover “geographical indicators”, which are names for food and alcoholic products drawn from a particular location, such Champagne or Cognac, both in France.

But U.S. business groups worry that the EU demand would mean American products as commonplace as Kraft parmesan cheese could potentially be treated as illegal items under the pact and subject to seizure by customs officials. Read more here.

Labelling Non-Food Products – Enforcement Guidelines for “Product of Canada” and “Made in Canada” Claims Now in Effect

(Ian K. Bies and Emily Rix, McCarthy Tétrault LLP)

Manufacturers and processors making “Product of Canada” and “Made in Canada” claims on non-food products will now have to comply with new guidelines from the Competition Bureau – or risk enforcement action. The enforcement guidelines, which recently came into effect, describe the Bureau’s approach to assessing these claims under the false or misleading representations provisions of the Competition Act, the Consumer Packaging and Labelling Act, and the Textile Labelling Act.

The guidelines set out the approach the Bureau will take in determining when it will investigate claims for non-compliance, or undertake enforcement action under the false or misleading representations provisions in these acts. The guidelines were released following public consultations last summer on a draft version of the guidelines, and replace the Bureau’s 2002 Guide to “Made in Canada Claims” Enforcement Guidelines.

The guidelines create a distinction between “Product of Canada” and “Made in Canada” claims for non-food products. “Product of Canada” claims are subject to a higher, “all or virtually all” 98% threshold of Canadian content (i.e., at least 98% of the total direct costs of producing or manufacturing the product must have been incurred in Canada). “Made in Canada” claims remain subject to a 51% content threshold, but should be accompanied by a statement declaring that the product contains imported content. In both instances, the last substantial transformation of the product must have occurred in Canada. Read more here.

‘Product of Canada’: Here We Go Again

(Lexology – Ronald L. Doering, Gowling Lafleur Henderson LLP)

The new “Product of Canada” guidelines came into effect on December 31, 2008, and were published as the new paragraph 4.19 in the Guide to Food Labelling: “a food product may claim ‘Product of Canada’ when all or virtually all major ingredients, processing and labour used to make the food product are Canadian.” The Guide defines the standard as 98%. It became clear within a matter of months that the standard was too restrictive and that the former producer and processor consensus of 85% would be more workable.

At a meeting of more than 50 representatives of the Canadian food processing industry on April 19, 2010, Minister of State for Agriculture the Honourable Jean-Pierre Blackburn announced new consultations on the issue but limited the exercise to a consideration of “exempting specific ingredients which are difficult to source in Canada”, i.e., sugar, vinegar and salt.

Who were the interests pushing for these three exemptions? Why not simply lower the threshold to 85%? Emails to officials to get some clarity on these questions remain unanswered.

By selecting without explanation three ingredients, officials have managed to create a minefield when an easy solution was there for the taking. This clumsy consultation, compounded by resort to an awkward computer questionnaire technique, is picking winners and losers while doing nothing to enlighten the consumer. Read more here.

New ‘Canadian’ Labelling Irks Industry

(Toronto Sun – Christina Spencer)

New federal standards for when a product may be marketed as “Made in Canada” have stirred confusion among some businesses and complaints from a national consumer group.

The standards, which take effect July 1, state that a consumer good can only be labelled or advertised as a “Product of Canada” if virtually all of its content originates in this country. It can be marketed as “Made in Canada” if 51% of its content is Canadian – provided the advertisement or label also carries a qualifying phrase such as “from imported products” if any components come from elsewhere.

The new standards replace a previous rule, which stated simply that any product – whether a toy, a car, a computer or any other non-food good – could be advertised as Canadian if 51% of its content and manufacturing took place here. No qualifier was needed. Read more here.

Competition Bureau Clarifies New Guidelines on “Made in Canada” and “Product of Canada” Claims

(Competition Bureau Canada)

The Competition Bureau… further clarified its enforcement approach to “Made in Canada” and “Product of Canada” claims.

In December 2009, the Bureau released its revised Enforcement Guidelines for "Product of Canada" and "Made in Canada" Claims. The Guidelines describe the Bureau’s approach to assessing "Product of Canada" and "Made in Canada" claims for non-food products under the false or misleading representations provisions of the Competition Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act. The Guidelines take effect on July 1, 2010.

As is always the case, businesses should note that a mere deviation from any enforcement Guidelines does not necessarily mean that the Bureau will launch an investigation or take enforcement action. All relevant factors will be examined, on a case-by-case basis, in order to determine whether potential issues are raised under the laws in question. Should a potential issue be identified, the Bureau has a variety of tools at its disposal to achieve compliance with those laws, ranging from education and awareness to enforcement action, where appropriate. […]

In order to ensure an effective and fair industry transition, and consistent with past practice when introducing new enforcement guidelines, for the six-month period following the July 1, 2010 implementation date, the Bureau confirms that it will only consider enforcement action in circumstances of bad faith. Specifically, in that transitional period, the Bureau confirms that, in the absence of bad faith, the Bureau will limit its response in cases of apparent non-compliance to education and warning letters consistent with the options outlined in the Bureau’s Conformity Continuum.

“Made in Canada” and “Product of Canada” Claims

(Lexology – Laurent Massam, Gowling Lafleur Henderson LLP)

The Competition Bureau has released Enforcement Guidelines relating to when “Product of Canada” and “Made in Canada” claims may be made in association with non-food products sold to Canadian consumers (“Guidelines”). Food products that are associated with “Made in Canada” and “Product of Canada” claims are subject to different guidelines created by the Canadian Food Inspection Agency.

Although the Guidelines are not legislation, they do describe the general approach of the Bureau to assessing “Made in Canada” and “Product of Canada” claims under the false and misleading representations provisions of various Acts, including the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

The Guidelines come into effect on July 1, 2010. After this date, all non-food products that are associated with a “Made in Canada” or “Product of Canada” claim, including inventory that is already on-shelf, must meet the conditions set out in the Guidelines. In certain circumstances, it may be necessary to consider options such as over-stickering to make product packaging compliant post July 1, 2010. Read more here.

Honey Might Need Country-of-Origin Labeling

(Farm and Dairy)

The U.S. Department of Agriculture is soliciting comments on its interim final rule for country-of-origin labeling of honey. USDA’s Agricultural Marketing Service is establishing a new regulation addressing country-of-origin labeling for packed honey bearing any official USDA mark or statement.

Under the new farm bill, the regulations governing inspection and certification would be amended to include a provision for country-of origin-labeling requirements for packed honey, and for debarment of services if the labeling requirements are not met for packages of honey containing official USDA grade marks or statements.

The 2008 farm bill requires that packaged honey, bearing any combination of USDA marks or statements, must also display the name or names of the one or more countries of origin of the lot or container, permanently in close proximity to the USDA marks or statement – such as on the same side(s) or surface(s), of a comparable size to the USDA marks or statements, and are preceded by the words “Product of” or other words of similar meaning.

To allow the industry to clear the market of labels that do not comply with the new rules, this interim final rule becomes effective October 6.

Written comments must be received by September 8 and should be sent to Chere L. Shorter, Processed Products Branch, Fruit and Vegetable Programs, Agricultural Marketing Service, USDA, Stop 0247, 1400 Independence Avenue S.W., Washington, DC 20250-0247; e-mailed to chere.shorter@usda.gov ; or faxed to 202- 690-1527. Electronic copies should be submitted to http://www.regulations.gov.

Canada Requests Further Round of WTO Consultations on U.S. Country-of-Origin Labelling

(Foreign Affairs and International Trade Canada)

The Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, and the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food, today announced that the Government of Canada is taking action on behalf of Canadian farmers in the dispute over U.S. country-of-origin labelling (COOL) measures. Canada has taken the next step in the World Trade Organization dispute settlement process by formally seeking further consultations with the United States.

“We are concerned with the approach the United States is taking to implement COOL and the negative impact it is having on our exporters,” said Minister Day. “Recent instructions from the U.S. Secretary of Agriculture encouraging the U.S. industry to use very strict labelling practices have removed the flexibility previously envisioned in the legislation and this affects the ability of our cattle and hog exporters to compete fairly in the U.S. market.”

“We are standing up for Canadian producers as we always have, and always will,” said Minister Ritz. “COOL is having a significant negative impact on the Canadian livestock industry and we are taking the necessary steps to ensure that our producers are treated fairly.”

Canada initially requested WTO consultations with the U.S. on COOL in December 2008, as it believed the measures were creating undue trade restrictions, to the detriment of Canadian exporters. At that time, U.S. provisions were being implemented on an interim basis.

A Final Rule to implement COOL was published in the U.S. Federal Register on January 15, 2009. However, on February 20, 2009, the U.S. Secretary of Agriculture issued an open letter to the U.S. industry, encouraging the use of stricter and broader labelling practices. According to Canadian industry representatives, those proposals will only add to the challenges they are already experiencing. They have observed that, since COOL came into effect, some U.S. processors are choosing not to buy Canadian animals, or are trying to buy them at a reduced price.

Mexico is in the process of filing a similar request at the WTO. This underscores both countries’ concerns over the impact of COOL on the integrated North American industry.

WTO consultations provide parties with an opportunity to resolve a dispute through discussions. If consultations fail to resolve the matter, the complaining party may request that the matter be referred to a WTO dispute settlement panel.

New Senate Bill Would Require Origin Disclosure for “Conflict Minerals”

(World Trade Interactive)

Legislation introduced April 24 in the Senate would require U.S.-registered companies selling products using columbite-tantalite, cassiterite or wolframite (or derivatives thereof) to annually disclose to the Securities and Exchange Commission the country of origin of those minerals. Metals derived from these minerals are used in common technological products such as mobile phones, laptops and digital cameras.

According to a joint press release from sponsors Sam Brownback, R-Kansas, Richard Durbin, D-Ill., and Russell Feingold, D-Wis., the Democratic Republic of Congo is rich in lucrative natural resources such as cassiterite (tin), columbite-tantalite or coltan (tantalum), wolframite (tungsten) and gold. These metals can be “inhumanely mined,” the press release states, and profits from selling them are often used to finance armed groups in the region, which has been “devastated by civil war, widespread human rights abuses and a humanitarian crisis that has resulted in the deaths of an estimated 5.4 million people.” Read more here.

U.S. COOL to Go Ahead Under Scrutiny

(Grainews)

In a move expected to create more uncertainty for [U.S.] importers of Canadian livestock and meat, the U.S. Department of Agriculture’s final rule on country-of-origin labelling (COOL) will take effect as planned next month.

President Barack Obama’s ag secretary, Tom Vilsack, confirmed that much in a release Friday, but Vilsack also published a letter he wrote to U.S. food industry stakeholders Friday, inviting them to “voluntarily adopt” practices that may tighten COOL beyond importers’ comfort zones.

USDA, Vilsack said in a release, “will be closely reviewing industry compliance with the rule and will evaluate the practicality of the suggestions for voluntary action in my letter.”

Depending on industry’s performance after the final rule takes effect March 16, as outlined in his letter, Vilsack said he would then “carefully consider whether modifications to the (COOL) rule will be necessary to achieve the intent of Congress.”

The “suggestions” in Vilsack’s letter include:

• tighter terminology on labels, including information about what production step took place in a given country, such as “Born in Country X and Raised and Slaughtered in Country Y”;

• voluntary labelling of processed foods, for which the definitions in the final rule “may be too broadly drafted” – meaning that in Vilsack’s view, products subject to curing, smoking, steaming, grilling or broiling should include a voluntary label; and

• a tighter inventory allowance – meaning that where a ground beef package, for example, could previously bear the name a country for up to 60 days even if product from that country isn’t in inventory, that number should be voluntarily reduced to 10 days, Vilsack said, to limit the levels of product without clear COOL and to give the label more credibility.

Read more here.

Government of Canada Responds to U.S. Country-of-Origin Labelling Measures

(Minister of International Trade)

The Government of the United States of America today published its final regulations for U.S. country-of-origin labelling (COOL). The Government of Canada recognizes provisions in the final rule that will help to level the playing field for Canadian producers and will strengthen the integrated North American livestock industry.

“I am pleased that key issues raised by Canada are addressed in these measures,” said the Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway. “Together with the provinces and industry, we will continue to assess the trade and market impact of this legislation. We have built a strong and durable trade relationship over the years with the United States and we must more than ever aggressively pursue this already robust relationship during these difficult economic times.”

“This government always stands up for Canadian livestock producers and that hard work is paying off as we protect and expand opportunities for our producers within the integrated North American beef industry,” said the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food. “These final regulations will help to address the concerns we’ve consistently raised with our American counterparts, and we will continue to work with the U.S. to prevent any unfair harm to our industry.”

“The bottom line is that the changes to the final rule will help to keep livestock trade moving throughout the integrated North American market and will benefit producers, consumers and processors,” added Minister Day.

The final regulations will allow for more flexibility on labelling requirements in the U.S. for meat from animals of American and Canadian origin that are brought together during a production run. Canada has repeatedly raised concerns that COOL could impose unfair costs, especially on Canadian livestock producers, by requiring the segregation of Canadian animals.

Most recently, Canada and the U.S. held formal consultations under the World Trade Organization regarding the adverse impact of the interim regulatory measures on Canadian livestock and meat producers. Canada will continue to monitor the situation and defend Canadian producers through discussions and representations to the U.S. at all levels.

The U.S. and Canada are each other’s largest agricultural trading partners. In 2007, bilateral agricultural trade totalled $32.3 billion.

Mexico Joins Canada in WTO Beef Complaint vs. U.S.

(Associated Press – Bradley S. Klapper)

Mexico joined Canada in opposing a new U.S. law on country-of-origin labeling for fresh beef and pork by filing a complaint with the World Trade Organization on Thursday.

A WTO official said the body received Mexico’s official complaint, which starts a 60-day consultation period between Mexican and U.S. authorities. After that, Mexico can ask the WTO to set up an investigative panel. Such trade disputes can result in punitive sanctions, but usually after years of litigation.

The WTO official spoke on customary anonymity and copies of the complaint were not immediately available. The Office of the U.S. Trade Representative in Washington could not immediately comment.

Canada’s government filed its complaint earlier this month, saying it was concerned the U.S. rules were discriminating against Canadian agricultural exporters.

Under country-of-origin labeling, foreign cattle and pigs must be segregated in U.S. feedlots and packing plants, prompting some firms to only deal with American livestock. Foreign animals are also required to have more documentation about where they come from and, in the case of cattle, must have tags that indicate they are free of mad cow disease.

Canadian farm groups say a growing number of meat plants in the U.S. are refusing to accept Canadian cattle and hogs for processing since the Country Of Origin Labeling (COOL) law went into effect on October 1.

United States: Many Unhappy With Proposed Changes To Country-Of-Origin

(Mondaq International Law)

The comment period has just closed on a proposal published last July in which U.S. Customs and Border Protection (“CBP”) suggested significant changes to the way in which the country of origin is determined for goods subjected to processing in more than one country (see previous alert here for more information). The proposed changes would affect not only such CBP issues as country of origin marking and duty rates, but also, potentially, government contracting, coastwise trade, and numerous other areas of commerce. Instead of continuing to employ a case-by-case analysis to determine whether a good undergoes a “substantial transformation” in a particular country – a technique dating back approximately a century – CBP has suggested a “tariff-shift”-based codification (currently used for NAFTA country-of-origin-marking purposes) that, according to CBP, would greatly improve the administration of the law by eliminating subjectivity and uncertainty, by promoting transparency and predictability, and by aiding importers’ exercise of reasonable care.

Judging from the scores of comments submitted by the twice-extended December 1, 2008 deadline, CBP appears to be quite alone in that view. The criticism leveled at CBP’s proposal falls essentially into three broad categories: (1) opposition to extending tariff shift principles to areas of the law where, contrary to CBP’s suggestion, doing so would be illegal, would overturn existing law, or both; (2) opposition to applying the tariff shift rules as written where, contrary to CBP’s assurance, the new rules will produce a result at odds with the body of law they were expected to codify; and (3) opposition in general to the proposed implementation of new rules on multiple grounds, including substantially increased costs, uncertainty, and burden on members of the trading community; substantially increased complexity; and abysmally poor timing. Read the complete article here.