Flax is one of the major cash crops in Canada. Approximately seventy percent of Canadian flaxseed was exported to European Union (EU) annually until 2009. In 2009, the EU imposed an import ban on Canadian flaxseed due to the adventitious presence of a GM flax variety - CDC Triffid was identified in Canadian flaxseed exported to the EU. The EUs decision to apply zero tolerance on CDC Triffid flax has been based on its interpretation of the precautionary principle. According to the World Trade Organisations Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), however, precautionary measures are subject to a scientific risk assessment. As the EU did not base its zero tolerance for CDC Triffid flax on any scientific risk assessment, the EU is in violation of the SPS Agreement. Moreover, the EU has ignored the available scientific information regarding CDC Triffid flax. The EU did not consider the possibility of following the guidelines given by Codex Alimentarius Commission in the case of CDC Triffid flax. There are non-scientific reasons behind the EUs zero tolerance on CDC Triffid flax and they overweigh the available scientific information. The EU position would be unlikely to be supported if a complaint was brought to the World Trade Organisation Disputes Panel.
A partial equilibrium model was used to provide a theoretical background to examine the changes in the flaxseed industry and the linseed oil industry due to the CDC Triffid event. A model of the supply chain of Canadian flaxseed was developed to illustrate the operationalisation of the Protocol developed by the EU and Canada to address the zero tolerance policy. Empirical estimation suggests that the operationalisation of the Protocol incurred additional cost of $7.5 million to the flax seed industry of Canada in 2009/ 2010. Out of that, cost of testing was approximately $1.2 million and cost of segregation was $4.2 million.
Estimation of changes in revenue suggests that there was a loss of revenue in flaxseed trade between the EU and Canada in 2009/2010. Imports of Canadian flax by China provided an alternative market, at a considerably lower price than typically realised from the EU market. Interestingly, the EUs zero tolerance policy on CDC Triffid flax has resulted in a larger additional cost on the EU than Canada.
| Identifer | oai:union.ndltd.org:USASK/oai:usask.ca:etd-06272011-111926 |
| Date | 11 July 2011 |
| Creators | Dayananda, Buwani |
| Contributors | Rosaasen, Ken, Smyth, Stuart, Kerr, William A., Ryan, Camie |
| Publisher | University of Saskatchewan |
| Source Sets | University of Saskatchewan Library |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://library.usask.ca/theses/available/etd-06272011-111926/ |
| Rights | unrestricted, I hereby certify that, if appropriate, I have obtained and attached hereto a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report, allowing distribution as specified below. I certify that the version I submitted is the same as that approved by my advisory committee. I hereby grant to University of Saskatchewan or its agents the non-exclusive license to archive and make accessible, under the conditions specified below, my thesis, dissertation, or project report in whole or in part in all forms of media, now or hereafter known. I retain all other ownership rights to the copyright of the thesis, dissertation or project report. I also retain the right to use in future works (such as articles or books) all or part of this thesis, dissertation, or project report. |
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