NATC Wants Financial Risk Mitigation for U.S. Exporters to Canada

At a recent meeting in Washington -- part of ongoing trilateral meetings to address issues affecting the North American produce trade -- the North American Trade Committee (NATC) called for the need for a mechanism to provide the type of protection afforded by the PACA Trust for sales in the Canadian marketplace.

Although some mechanisms are available to help mitigate and help resolve claims on produce, such as Dispute Resolution Corp. (DRC), the Canadian Food Inspection Agency (CFIA) and the courts), there is virtually nothing now in place to mitigate and offset losses arising from payment problems. While Canadian exporters enjoy the protection of the PACA Trust when shipping to the United States, there’s no reciprocal treatment of U.S. exporters to Canada. “When it comes to doing business in Canada, everyone is at risk,” said Matt McInerney, EVP of Western Growers and NATC co-chair. “Our frustration level continues to grow as financial losses in the Canadian marketplace continue to accumulate, with no resolution in sight.”

Based on its experience in the U.S. market over the last quarter-century, the NATC is pushing for the introduction of financial risk mitigation provisions in Canada like those now available under the PACA Trust. In the United States, it is estimated the PACA Trust has saved produce sellers, including Canadian exporters, more than $1 billion to date.

“This is a trade issue, and we are most concerned that our exporters may be at risk if we don’t find a suitable financial risk mitigation tool for implementation in the Canadian marketplace,” explained Ken Forth, chair of the Canadian Horticultural Council’s Trade & Industry Standards Committee. “Our exporters can use the PACA trust provisions to cover their sales to U.S. receivers. In addition, they can use the PACA formal dispute settlement service without having to post a bond in twice the amount of the claim. No other foreign country outside of Canada enjoys this particular privilege of not having to post a bond.”

The North American Trade Committee (NATC) comprises industry organization representatives from across Canada, the United States and Mexico. The committee’s focus is to develop industry consensus on issues affecting the North American fresh fruit and vegetable business, with the aim of facilitating trade and providing governments with industry counsel and consensus on key issues.