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Exchange of Letters between the Government of Canada and the Government of the United States of America constituting an Agreement amending Schedule 2 of Annex 705.4, as amended, of the Free Trade Agreement [1993] CATSer 7 (30 April 1993)

E100681 - CTS 1993 No. 4

EXCHANGE OF LETTERS BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA CONSTITUTING AN AGREEMENT AMENDING SCHEDULE 2 OF ANNEX 705.4 AS AMENDED, OF THE FREE TRADE AGREEMENT

I

The Minister (Economic) and Deputy Head of Mission of Canada to the United States Trade Representative

WASHINGTON, D.C., April 30, 1993

The Honourable Michael Kantor
United States Trade Representative
Washington, D.C.

Dear Ambassador Kantor,

I have the honour to refer to recent discussions between officials of our two Governments in the Working Group established for the purpose of Annex 705.4 to the Canada-United States Free Trade Agreement on the Levels of Government Support for Wheat, Oats and Barley.

I have the further honour to propose, pursuant to paragraphs 5 and 6 of the Annex, that our Governments agree to include under Schedule 2 "Canadian Government Support Programs", Part A "Direct Payments", of the Annex the following programs and agreed-to-methodology:

5.5 Payments Pursuant to the Gross Revenue Insurance Plan (GRIP)

The support provided by the federal and provincial governments to producers of barley through the GRIP is two-thirds of the total amount paid to producers of barley for that crop year. The support is computed in accordance with the following formula:

A = B * b

where:

A = government support provided to barley producers through the Gross Revenue Insurance Plan for the crop year

B = total payout to barley producers from the Gross Revenue Insurance Plan for the crop year

5.5a Payments Pursuant to the Gross Revenue Insurance Plan for the 1991/92 Crop Year

During the 1991/92 crop year, the federal government reduced the producer's share of the Revenue Protection Plan of GRIP premiums by 25% under the Farm Support and Adjustment Measures Program. Therefore, the following formula will be used for the 1991/92 crop year only:

A = B * ¾

where

A = government support provided to barley producers through the Gross Revenue Insurance Plan for the crop year

B = total payout to barley producers from the Gross Revenue Insurance Plan for the crop year

5.6 Repayment of the 1990/91 Western Grain Stabilization Act (WGSA) Overpayment

The repayment of the 1990/91 WGSA overpayment to barley producers is 8.4% of the total amount repaid by all grain producers in that crop year. The repayment of the 1990/91 WGSA overpayment is computed in accordance with the following formula:

A = B * 8.4%

where:

A = the amount of the 1990/91 Western Grain Stabilization Act overpayment repaid by barley producers in that crop year

B = the total amount of the 1990/91 Western Grain Stabilization Act overpayment repaid by all producers in that crop year

I have the further honour to propose, if you agree, that this letter, which is authentic in English and in French, together with your reply, shall constitute an Agreement between our two Governments, to enter into force on this date and that the above-referenced proposals shall become an integral part of the Canada-United states Free Trade Agreement.

Yours sincerely,

M.A. Brault

Minister (Economic) and Deputy Head of Mission

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The United States Trade Representative to the Minister (Economic) and Deputy Head of Mission of Canada

WASHINGTON, D.C., April 30, 1993

The Honorable M. A. Brault
Chargé d'Affaires
Embassy of Canada
Washington, DC

Dear Mr. Brault:

I am pleased to receive your letter of today's date, which reads as follows:

(See Canadian Letter of April 30, 1993)

I have the honor to confirm on behalf of the Government of the United States that the above proposals are acceptable to my Government and to agree that your letter and this reply shall constitute an Agreement between our two Governments.

Sincerely,

Michael Kantor