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3rd Meeting of the CETA Trade in Goods Committee

21 January 2021 (by videoconference)

Report

  1. Adoption of the agenda
    The agenda was adopted.
  2. Report of the Joint Sectoral Group (JSG) on Pharmaceuticals meeting and follow up (Canada and EU item)
    Both sides presented the joint report of the Joint Sectoral Group on Pharmaceutical Products which took place on 1 December 2020. The Committee expressed satisfaction with the work carried out and encouraged the JSG on Pharmaceuticals to continue its good cooperation on the recognition of inspections conducted in countries outside of the respective Parties’ jurisdictions and on the future extension of the scope of the CETA Protocol on Pharmaceuticals to include active pharmaceutical ingredients.
  3. Canadian Interim Order Respecting Drug Shortages (Safeguarding the Drug Supply) (EU Item)
    The EU asked for information concerning the Interim Order Respecting Drug Shortages adopted by Canada on 27 November 2020. The EU asked, in particular, about the scope of this measure and its temporary character. Canada confirmed that the measure was notified to the WTO and that it will apply for a period of 12 months. Canada also clarified that the measure does not apply to products that are produced for the sole purpose of export and that, in a case where a company produces both for Canada and for export, it does not concern products intended for export. The onus is on the industry to apply this regulation and apply due diligence (there is no system of prior authorisations). Canada explained also that the Interim Order does not cover Active Pharmaceutical Ingredients but only the finished dosage form.
  4. Carbon Border Adjustment (Canada and EU item)
    The EU and Canada exchanged information on their respective work regarding Carbon Border Adjustment mechanisms. Canada noted the adoption of the European Green Deal and that the government is also exploring the potential of border carbon adjustments in the framework of Canada’s transition to a low-carbon economy. Canada was interested to learn more about the developments of the EU policy and the preliminary outcome of the impact assessment. Canada requested an opportunity to engage with the EU on this issue at the technical level with DG Taxud.
    The EU noted that the creation of a Carbon Border Adjustment Mechanism (CBAM) was identified in the European Green Deal as one of the means to help with the transition towards a greener and more sustainable economy. The EU is now assessing the contributions received through the public consultation that was open between July and October 2020. These results will feed into the impact assessment that should be finalised in March/April. The legislative proposal is planned for June 2021. The EU was not in a position to share the results of the impact assessment yet but referred to the inception impact assessment published in March 2020 that outlines the main policy options taken into consideration for a Carbon Border Adjustment mechanism. The EU reassured Canada that the compatibility with WTO rules is at the heart of the design of the instrument. The EU also confirmed that the instrument should take into account the carbon price in the EU and in a partner country.
  5. EU Environmental Footprint (Canada item)
    The EU replied to Canada’s questions regarding the “Green Claims” initiative and its relationship with other initiatives related to the European Green Deal. The EU clarified that as any other legislative proposal, the green claims initiative needs to be backed-up by an impact assessment. The public consultation was open between August and December 2020 and the EU organised several stakeholders’ workshops to discuss with the stakeholders possible elements of this initiative. The contributions of stakeholders are currently being assessed in the context of the impact assessment. The EU plans to adopt a proposal on the Green Claims initiative in the second quarter of 2021.
  6. TBT Issues
    1. State of play of the implementation of the Conformity Assessment Protocol (Canada and EU item)
      The EU updated Canada on the necessary internal steps to implement the Conformity Assessment Protocol. The EU informed, in particular, that the Commission is working with the Member States working group on a guidance document. The EU will continue exchanges with Canada at a technical level to ensure the full implementation of the Protocol. Canada stressed the importance it attaches to implementing the Protocol as soon as possible.
    2. Regulation (EU) 2019/1020 on market surveillance and compliance of products (Canada item)
      Upon Canada’s request, the EU provided an overview of the state of play of the implementation of Regulation (EU) 2019/1020 on market surveillance and compliance of products, and the issuance of guidelines on Article 4.
    3. French Labelling Requirement - TRIMAN Logo and Sorting Instructions (Canada item)
      Canada noted the importance of balancing the need to provide information and the burden of placing the information on packaging instead of in product instructions. It also raised concerns regarding the rapidity of the measure’s implementation, sought information on EU actions to avoid this and offered to provide information on the cost burden that had been raised by stakeholders. The Commission took note of Canada’s comments, requests and questions concerning the French measure that had been notified to the Commission under the Single Market Transparency Directive. The Commission explained that it was not in a position to reply to Canada’s questions due to the ongoing internal EU review procedure for national technical regulations. Canada will continue to ask the EU for updates.
    4. Waste Framework Directive - the implementation of the SCIP Database (Canada item)
      The revised EU Waste Framework Directive requires the European Chemicals Agency (ECHA) to establish and maintain a database on Substances of Concern In articles or Products – the so-called SCIP database – and to provide access to this information to waste operators and, upon request, to consumers. This obligation concerns articles placed on the EU market and containing “Substances of Very High Concern” or “SVHC” (in practice, REACH Candidate list substances) in a concentration above 0.1% weight by weight. The legal obligation for suppliers to submit information to ECHA on articles containing substances of very high concern (SVHC) started on 5 January 2021.

      Canada shared the concerns voiced by its stakeholders over a reduction of the allocated time available to submit notifications into the SCIP database as a result of the formal opening of the database on 28 October 2020, rather than 5 January 2020 as codified under the Directive. Canada considered that this situation left stakeholders with only two months to notify their products into the database in order to comply with the legal obligation of the Directive, as well as little time to adjust their IT system (system-to-system services) to ensure compatibility. The EU considered that the date of application of the legal obligation, for suppliers to start submitting information, was 5 January 2021, and that suppliers were legally obliged to start submitting the information from 5 January 2021, not earlier.

      The EU pointed out that to a certain extent, suppliers can build on arrangements put in place to comply with the existing obligation under Article 33 of the REACH Regulation to provide information on the presence of SVHC in articles. The provision under the Waste Framework Directive (Art 9(1)(i) of 2008/98/EC) extends and complements the REACH obligation. The information requirements should, in essence, already be available to suppliers, also considering that these were published by ECHA in September 2019. ECHA launched the SCIP prototype in February 2020, with all the basic required features and the “live” version on 28 October 2020.

      Canada also asked questions about the status of the national transposition of the revised Directive by Member States, as it appears that several of them have yet to notify the European Commission of the completion of their domestic processesFootnote 1. The EU stated that the Commission has launched a formal infringement procedure for those MS who did not communicate the transposition measures of Directive (EU) 2018/851 into national law.

      Finally, Canada asked questions about the enforcement mechanisms put in place by Member States to verify that suppliers and manufacturers were respecting the new obligations. The EU confirmed that the enforcement of the legislation is the responsibility of the MS.
  7. Report of the Agriculture Committee meeting and follow-up (Canada and EU item)
    Both sides reported on progress made at the meeting of the third Committee on Agriculture, held on 21-22 September 2020. The EU welcomed the resumption of the TRQ review in Canada and committed to send updated comments on the management of Canada’s CETA cheese TRQ. The EU expressed an expectation that Canada will address the EU concerns regarding structural problems resulting from management of this quota.
    The EU expressed disappointment with the continuation by Canada of the countervailing and anti-dumping duties on refined sugar imported from EU Member States as well as the new antidumping investigation on imports of wheat gluten.
    Canada declared that EU reforms on pesticides and veterinary medicines related to the Farm to Fork Strategy could have a high impact on Canadian exports. Canada expressed interest to participate in the consultative process and to cooperate with the EU to ensure trade impacts can be minimized. Canada will also follow the reforms concerning origin labelling (COOL). Both sides agreed to work closely together to drive the sustainable agriculture agenda forward.

    Canada also raised the issue of apportionment of WTO quotas related to Brexit and reiterated its view that the EU TRQ available to Canada under CETA should not be reduced.
  8. Report of the Wine and Spirits Committee and follow-up (Canada and EU item)
    Both sides reported on the results of the Wine and Spirits Committee meeting held on 5-6 October 2020. The EU urged Canada to apply new rates of the cost of services differentials in Ontario and Quebec and to launch the process to amend CETA annexes to include additional Geographical Indications (GIs). The EU took note of the positive developments related to the partial settlement Canada reached with Australia in the WTO dispute on wines. The EU stressed however that there is still more work ahead in order to fully implement the CETA declaration on wines and spirits.
  9. Report of the GI Committee meeting and follow-up (Canada and EU item)
    Both sides reported on the discussions at the 22 October 2020 meeting of the Committee on GIs and reflected on difficulties to make progress in the discussions on several contentious issues. Canada presented best practices when requesting GI protection with the Canadian Intellectual Property Office (CIPO) and encouraged EU stakeholders to use the open registration system in Canada. With regard to enforcement of Intellectual Property (IP) rights, Canada encouraged the EU right holders to contact producers or businesses that they believe should not make use of their terms. Canada noted that, in its experience, entities are often willing to discontinue use of a term voluntarily when informed of the existence of IP rights that they may be infringing. Separate from the IP system, the Canadian Food Inspection Agency (CFIA) also presented its complaints system under its legislative framework that addresses certain health and safety risks and protects consumers from false or misleading representation and deceptive marketing practices. The EU indicated that it will encourage its rights-holders to use these avenues and that it will continue to closely monitor the process for GI rights enforcement in Canada.

    The EU informed Canada of the launch of its GI database, GIView, before the end of 2020 and Canada indicated that this should facilitate GI border enforcement in Canada.
  10. Any other business (AOB)
    1. EU – U.S. Tariff Agreement (Canada item)
      The EU explained the context of the adoption of EU Regulation 2020/2131 on the elimination of customs duties on certain products, by which the EU eliminates tariffs on certain types of lobster on an MFN basis. The Regulation, which entered into force on 18 December 2020, puts into effect an EU-US Joint Statement of 21 August 2020. Canada noted the disappointment of Canadian lobster exporters with the loss of the CETA tariff advantage as a result of the EU-U.S. Tariff Agreement, especially since, as the only other major supplier of Homarus Americanus (“American Lobster”) in the world, this Agreement has the largest impact on Canadian lobster exports to the EU, which had increased significantly since the entry into force of CETA. The EU expressed understanding for Canada’s concern and pointed at the fact that Canada implemented in 2017 (just after the signature of CETA) unilateral MFN tariff elimination on certain imported ingredients used in the agri-food processing industry that were also covered by CETA tariffs’ liberalisation.
    2. UK –Canada Continuity Agreement (EU item)
      Canada presented briefly the scope of the Canada – UK Trade Continuity Agreement. The EU flagged its concern as regards future UK access to the EU share of WTO cheese quota.
    3. Canadian Agri-Environmental Strategy (EU item)
      Canada informed that the Government committed to provide $98.4 million over ten years, starting in 2021-2022 to Agriculture and Agri-Food Canada to establish a new Natural Climate Solutions for Agriculture Fund. This fund will leverage $85 million in existing programming and will be guided by a new Canadian Agri-Environmental Strategy to be developed in collaboration with partners to support the sector’s actions on climate change and other environmental priorities towards 2030 and 2050.
  11. Next Steps
    It was agreed that the next meeting would take place by the end of 2021 or at the beginning of 2022.

Participants:

Canada:

EU:

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