+ RMA Rural Municipalities
of Alberta

Resolution 3-03F

Tariff Rate Quota Penalties

January 1, 2003
Expiry Date:
December 1, 2006
Active Status:
Vote Results:

WHEREAS Canadas major beef trade export markets closed their borders to Canadian beef because of a single case of bovine spongiform encephalopathy (BSE);AND WHEREAS free movement of Canadian beef has still not been fully restored;AND WHEREAS closure of these international markets has resulted in an oversupply of beef in Canada crippling the industry;AND WHEREAS Canadas agreement on international trade through the World Trade Organization sets a tariff rate quota (TRQ) of 76,409 tonnes for beef imported from non-NAFTA countries tariff-free;AND WHEREAS importers holding TRQs that do not use 90% of their quota in a given year and do not return their unused quota by October 31 are penalized in the next quota year to the level of usage;AND WHEREAS as of September 15, 2003, 16,791 tonnes, the equivalent of 85,000 head of cattle, have yet to be imported in 2003 within quota limits;AND WHEREAS the penalty will encourage TRQ holders to either use at least 90% of their quota or turn them in to be used by other importers, which will further aggravate the oversupply of cattle in Canada;

Operative Clause:

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the federal government to refrain from penalizing tariff rate quota (TRQ) holders that do not use 90% of their quota and who do not turn in their quotas for the years 2003 and 2004.

Member Background:

When a single case of bovine spongiform encephalopathy (BSE), commonly known as mad cow disease, was reported on May 20, 2003, Canadas major beef trade export markets closed their borders to Canadian beef. These borders are still not fully open. This has resulted in a huge surplus of beef in the Canadian market and devastation to the industry. Added to this is the immediate crisis of what to do with cull cattle.Under international trade agreements through the World Trade Organization, Canada has a commitment that will allow the importation of up to 76,409 tonnes of beef tariff-free from non-NAFTA countries. This tariff rate quota, or TRQ, is administered through the federal governments Department of Foreign Affairs and International Trade.As of September 15, the remaining portion of beef to be imported under the TRQ limits is 16,791 tonnes, which is the equivalent of approximately 85,000 head of cattle. TRQ holders can use their quotas until the end of the year but, if the holder does not use 90% of their quota in a given year and does not return the quota back by October 31, the quota holder is penalized in the next quota year. The penalty drops the quota holders quota back to the actual usage.Our concern here is that this forces the holder to import additional beef up to at least his 90% quota level or turn the remaining quota in, which could then be reassigned. Either way, it encourages additional imports which our industry can ill afford in this period of crisis. We feel that removing the penalties will result in the importation of less beef. In addition, this will provide time to further develop our domestic market. We respectfully request your support for our resolution and thank you for your consideration.

RMA Background:

The AAMDC has no resolutions currently in effect with respect to this issue.

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