RESTRICTEDWORLD TRADE
ORGANIZATIONG/RO/W/77
22 March 2002
(02-1485)
Committee on Rules of Origin Original:  English
CHAPTERS 1-24 (AGRICULTURAL PRODUCTS AND FISH)
Submission by Canada
The following submission, dated 19 March 2002, has been received from the Permanent
Mission  of Canada.
_______________
Issue 2 - Slaughter
The meat, meat products, hair bristles, hides, blood and other such animal products which
come out of a slaughter plant bear no resemblance to the live animals which enter the plant.  There is
no way that the sum of the parts will ever be able to reconstitute the live animal.
Holding animals for a time before slaughter because of sanitary and phyto-sanitary concerns
is not only a misuse of the rules of origin, but a serious danger to animal health.  If the concern is thepresence of foot and mouth disease (FMD), holding infected animals will result in the contamination
of the surroundings and spread to healthy animals.  If the concern is bovine spongiform
encephalopathy (BSE), holding an animal for a few months will prove nothing as the disease takes
several years to manifest itself and even then, only an autopsy provides definitive proof of its
presence.  The proper method for handling suspected disease-harboring animals is through quarantine
and that is not within the scope of the rules of origin.
Canada would like to re-iterate its proposed compromise of 1: A raising/fattening of animals
fattening for 3 months and for 2 : A slaughter is origin conferring.
Issue Nos. 12 and 13 – fish meats and fish fillets
The fisheries sector is an area of particular interest to Canada. Fishing is vital to the
communities and families on both the Pacific and Atlantic coasts. This industry has played a key role
in Canada’s development since its inception as a nation.  The industry has far more depth than the
simple catching of fish; the processing of seafood products in plants in coastal communities is of
particular significance in recent years. The Government of Canada places a high priority on theprosperity of these industries and the workers that they employ.
Beyond the purely industrial aspects, it is important to consider the state of the fish stocks as
the resource that fuels this sector. Canadian groundfish stocks over the past decade have been severely
depressed which has served to highlight the importance of this industry. In fact, specific groundfishstocks on the Atlantic coast have been closed to fishing since 1992 resulting in the importation of
unprocessed fish for further processing and value adding. The Government of Canada through its
Department of Fisheries and Oceans has adopted an approach based on the precautionary principle to
address conservation concerns. A comprehensive and forward-looking policy espousing sustainable
development in the management of fish stocks is a corner stone of the Canadian approach. The
Department of Fisheries and Oceans has undertaken a consultative stakeholder approach to ensure the
protection and the long-term recovery of stocks.G/RO/W/77
Page 2
The challenges presented by the domestic resource shortfall of specific finfish species have
led to innovations in processing that has allowed Canada to act as a processing centre for fish from a
variety of international sources. The processing facilities that exist in Canada provide the means for
many fishermen and companies to have their catch skillfully processed to exacting standards.
It is important to look at the processing of fish into fillets or meat on the simplest level. It is
an irreversible act whereby the fish cannot be reconstituted into its original state. This processing of
fish to both meat and fillets is the process by which the majority of value is added to the fish. In fact,
other than smoking and salting treatments, the processing of the fish in this manner is the greatest
transformation that occurs to the flesh of fish. Given the clearly substantive changes, the labour of the
processes and the value that is added during the transformation, the conferring of origin is clearly
indicated. For these reasons, Canada believes the agreement for Issue 12 should be Option A, originconferring (CTH) and for Issue 13 it should be Option A, origin conferring (CTH).
Issue No. 53 - refining of sugar
The point under discussion is whether refined sugar is substantially different from raw sugar.Canada considers that there are significant differences between raw and refined sugar.
1  These
include:
1. Change in character.
The refining process effects a fundamental change in the structure and chemical makeup of
raw sugar.  Raw sugar is composed of crystals about one millimeter in size mixed with other
substances.  The crystals contain sucrose, mineral salts, monosaccharides, polysaccharides, aromatic
compounds, iron and other materials occluded within the crystal and incorporated in the crystal latticestructure.  The mixture surrounding the crystal is composed of various organic and inorganic
substances.  Raw sugar is relatively perishable.
During the refining process the crystal structures in the raw sugar are completely broken
down to molecular constituents so as to completely lose their physical identity.  The refined sugar that
emerges is composed of new sucrose crystals that no longer contain nonsucrose materials occluded
within the crystals.  Average crystal size is 0.35 millimeters.  In addition, nonsucrose materials mixedwith and coating the raw sugar crystals are removed in refining through extensive processing
operations involving both chemical and physical reactions and changes.  Refined sugar has an almost
infinite shelf-life.
As a result, raw and refined sugar are fundamentally different products with significant
differences in crystal structure and size, color, odor, texture, bacterial level, chemical makeup, taste
and shelf-life.
2. Change in use.
Raw sugar is a non food grade raw material. It is illegal both in Canada and the U.S. to sell
raw sugar for human consumption.  Raw sugar is not only an intermediate product used to
manufacture refined sugar, but is used for other commercial purposes, including cement
manufacturing, animal feed and ethanol production.
Refined sugar can be used directly for human consumption or can be used as an ingredient in
a wide variety of food stuffs, including confectionary goods and beverages.
                                                     
1 From a 1987 Canadian industry submission to US Customs Service.G/RO/W/77
Page 3
3.  Change in Value.
Because of the complex and expensive processing required, the refining process adds
substantial value (approximately 50%) to the raw sugar.
4.  Substantial processing.
Refining usually consists of the following processes: affination, melting and straining,
clarification, filtration/flotation, decolorization, evaporation, crystallization and centrifuging.  The
refining of raw sugar is a complex and technologically sophisticated process, using substantial and
expensive equipment and operations with sophisticated controls.
The refining process produces essentially pure sucrose.  During refining, raw sugar crystals
are completely melted.  From this melted stream, new pure sucrose crystals are eventually
crystallized. Refining rearranges the chemical and physical structure of the raw material allowing for
the production of pure sugar crystals and removes a number of organic (including bacteria and sugar
lice) and inorganic materials.
Issue Nos. 58-64 - Cocoa
The following information concerning the steps in making chocolate preparations has been
taken from the International Cocoa Organization’s (ICCO) website,www.icco.org/questions/choco.htm.   The details of the procedures were provided by Hershey USA.
In response to the question (Q & A section) “Is it possible to make chocolate at home from an
unprocessed cocoa bean or from cocoa powder”, the ICCO states:
No, it is not possible to make chocolate from an unprocessed cocoa bean.  The fermentation
and drying of the cocoa beans after harvest are what develop the chocolate flavour in the
beans. Once the beans reach a cocoa processor they undergo roasting and an alkalisation
process which further develops and enhances the chocolate flavour and color.
Chocolate cannot be made using cocoa powder.  During the processing of cocoa beans the
cocoa liquor is created (cocoa particles suspended in cocoa butter) and then either cocoapowder is formed by removing the cocoa butter or the liquor is used to make chocolate with
additional cocoa butter.
This statement from the ICCO supports origin conferring for issue 58: obtaining cocoa paste
(1803) the cocoa bean must be first processed into cocoa paste, not defatted (cocoa liquor) beforeother cocoa products can be made such as cocoa butter, powder and chocolate.  As the adjoined table
shows, there are 6 processes involved in the making of the cocoa paste.
Making cocoa powder from cocoa paste (issue 60) entails 7 processes including the tempering
of the product which controls the crystal growth (see table) which is done under strict temperaturecontrol .
From the chocolate crumb (1806.20b), which is the pre-cursor to the finished retail chocolate,
to the retail chocolate bar there are at minimum five processes including the addition of lecithins and
butter, refining, conching and tempering.  These do not include the deposition or enrobing, moulding
and cooling of the bars.  Clearly, the transformation of the 2 kg + blocks of chocolate crumb to the
final retail product entails more than breaking up and melting of a 2 kg + block into smaller pieces.G/RO/W/77
Page 4
As can be seen, the making of chocolate involves many  industrial processes.  For these
reasons Canada believes that, as a minimum, issue 58 should be CTH, issue 60 should be CTH and
issue 64 should be CTSH to recognize the substantial transformations which occur in the making of
cocoa paste, cocoa powder and cocoa preparations from chocolate crumb.G/RO/W/77
Page 5STEPS INVOLVED IN THE PROCESSING OF COCOA
ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
1. The cocoa beans are cleaned to
remove all extraneous material.Cocoa
beansextraneous
materialcleaning
2. To bring out the chocolate
flavour and color, the beans are
roasted.Cocoa
beansroasting The temperature, time and degree of
moisture involved in roasting depends
on the type of beans used and the sort of
chocolate or product required from the
process
3. A winnowing machine is used toremove the shells from the beans toleave just the cocoa nibs.Cocoa
beanscocoa nibs
shellswinnowing
4. The cocoa nibs undergo
alkalisation, usually with potassium
carbonate, to develop the flavour
and colour.cocoa nibs  alkalisation
5. The nibs are milled to create
cocoa liquor (cocoa paste, notdefatted - 1803).cocoa nibs cocoa paste
(1803)milling
heated storageThe temperature and degree of milling
varies according to the type of nib usedand the product required.
Once nibs are ground into liquor, or
cocoa mass, the resultant liquid must be
maintained above a minimumtemperature of 90 F ideally 120 F
otherwise the mass would crystallize
and become a solid.G/RO/W/77
Page 6
ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
58
obtaining cocoa
paste (1803)6. Manufacturers generally use
more than one type of bean in their
products and therefore, the different
beans have to be blended togetherto the required formula.
The cocoa paste can follow two
tracks, one leads to industrial
products such as cocoa powder and
the other to finished chocolateproducts.cocoa
paste
(1803)cocoa paste
(1803)Blending
59
obtaining cocoa
butter, fat and
oil (1804)Industrial chocolate products
7. The cocoa liquor is pressed to
extract the cocoa butter leaving a
solid mass called cocoa presscake.
The amount of butter extractedfrom the liquor is controlled by the
manufacturer to produce presscake
with different proportions of fat. cocoa
paste (not
defatted)
1803cocoa butter
cocoa
presscakeHeating Prior to being able to press cocoa mass
for butter and press cake moisture is
added to the liquor to assist in butter
removal by producing steam, and the
liquor must be heated to >200 F.  This
temperature insures total melting of anycrystals including the stearins and the
lowest viscosity possible.  It also
prepares the liquor for the high
temperatures and steam buildup
resulting from the high pressure in thepress which if not conditioned would
cause the press to blow.
Press,hydraulicThe number of pots, chambers, in the
press vary.  They are filled
volumetrically.  The amount of fatremoved depends on the amount of
pressure and length of time it is applied.
Pressures reach >6000 psi.G/RO/W/77
Page 7ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
8. The processing now takes two
different directions.  The cocoa
butter is used in the manufacture of
chocolate.  The cocoa presscake isbroken into small pieces to form
kibbled presscake which is then
pulverised to form cocoa powder.cocoa
press-cake
diskskibble (up
to 6")Kibble milling This mill breaks down the disks into
large chunks and a distribution of
particle sizes from up to 6 inch diameter
chunks to actual powder.  This is inpreparation for secondary crushing
kibble (upto 6")fine kibble
(sand-like)crushing This unit reduces the kibble to a
sand-like consistency which will thenbe fed to the powder mills.  It operates
under cool air to minimize liquid fat.
This is still referred to as kibble since it
is totally unacceptable as powder.  This
is also a convenient form to package
and sell or ship to satellite plants.
fine kibble
(sand-like)then fine
cocoa
powder
(98% < 200
mesh)Powder Mill
Hammer Type
orFurther reduction in size can be
accomplished by mills designed to
handle hard particles.  The hammer mill
uses blunt, metal rotating arms within a
screened confine to force particle size
down and through the screens.G/RO/W/77
Page 8
ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
fine kibble
(sand-like)fine cocoa
powder
(98% < 200
mesh)Powder Mill
Air MillsThe air mill blows the course powder
past high speed rotating blades that
produce a fine powder.  The air in the
mill further acts as a classifier (readbelow).  The powder stays in the
grinding chamber as long as it is too
heavy to leave.  The air temperature is
controlled to minimize heat generation.
“MILL”:  Both types of mills not onlybreak the agglomerates produced in
pressing but they also grind the
fundamental particles down into a finer
powder.  Milling constitutes a
significant transformation.  There is a40% increase in particles less than 50
microns.G/RO/W/77
Page 9ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
fine cocoa
powder
(98% <
200 mesh)Classifier The particles exiting in hammering mill
have a bread distribution.  The classifier
controls particles size distribution by
separating large particles for smallparticles by means of centrifugal force.
The larger particles are either reduced in
size by particle to particle breaking or
they are removed and run through the
mill again.  Air mills act as their ownclassifier.  Adjustments on the
equipment determine the particle size
distribution.  The end particle size is
much smaller than achieved in the
initial liquor-milling step.  Airtemperatures are controlled to minimize
heat build-up.  “MOISTURE”: The
powder with a high surface area is
prone to moisture pickup.  With all of
the air it is exposed to it eventuallyequilibrates out at about 3%.G/RO/W/77
Page 10
ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
60
unsweetened
cocoa powder
from cocoapaste (1805)fine cocoa
powder
(98% <
200 mesh)finished
powder
(98% <200
mesh)Tempering Cocoa butter is a polymorphic fat.  That
is, it is capable of producing several fat
crystals upon cooling.  In the case of
cocoa butter, there are 5 forms withonly the top 2 being stable.  Tempering
is a process of controlling the
solidification of the fat so that the stable
forms are forced right away.  The hot
powder ranging from 130 to 175 F. hasto be cooled down to approximately 80
to form crystals.  The powder then has
to be heated up to 86 F to melt out
unstable forms and then finally the
powder is cooled down below 80 toallow most of the fat to crystallize in a
stable form.  All of this must be done
dynamically to prevent crystal matrixes,
that is to prevent the fat from knitting
together particle to particle.  Temperingeffects the powder color appearance; it
will have a richer brown color.
Tempering effects the density of the
powder, it will be denser when
tempered.  Tempering effectsflowability; it will flow over extended
lengths of time of storage, because the
fat will not be melting and
re-crystallizing in a static state causing
fat crystal matrixes.G/RO/W/77
Page 11ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
61 adding sugar
to cocoa powder
(1806.10)
62
making cocoa
preparations, in
liquid, powder
or granular form
from cocoapowder
(1806.20a)ice cream
mixes,
63 making
cocoa
preparations in
blocks, slabs or
bars (1806.20b)Finished chocolate products
9. Cocoa liquor is used to form
chocolate through the addition of
cocoa butter.  Other ingredientssuch as sugar, milk emulsifying
agents and cocoa butter equivalents
are also added and mixed.  The
proportions of the different
ingredients depends on the type ofchocolate being made.Cocoa
pasteChocolate
Crumb
(sandlike)additions &
mixingcocoa butter, sugar, milk emulsifying
agents and cocoa butter equivalents are
includedG/RO/W/77
Page 12
ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
Transport
StorageCrumb is most commonly packaged and
transported in supersacks.  Although the
starting material for crumb is a
distribution of particles from powder upto half inch size, the particles
agglomerate in both transporting and at
storage.
The crumb must be stored at a cool
temperature and low humidity, <80 F
and < 86% RH to minimize the melting
of the fats, cocoa butter and milk fat.
Unload There will always be agglomerates due
to handling, transporting and storing.
Emptying the supersacks of crumb
requires manipulation of the sacks tobreak up agglomerates that have
formed.
chocolatecrumb
(sandlike)dry crumb
(sandlike)Dry The hygroscopicity of crumb is such
that it will readily pick up moisture.
Without the protective coating ofsufficient cocoa butter, the sand-like
consistency has too much exposed
surface area to ideally avoid moisture
pick up.  The crumb is exposed to
forced hot air at an appropriatetemperature of 200 F to remove
moisture to <1%.  Chocolate melting
cannot tolerate moisture greater than
1%.  This step is critical in making the
crumb useable.G/RO/W/77
Page 13ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
Mix A significant transformation occurs
when a sand-like material is changed to
a pasty material, and the ingredient
composition is altered.  The cocoabutter and lecithin added to the crumb
increases fluidity.  Flavorings are added
to change the flavor profile.
10.  The mixture then undergoes arefining process by travellingthrough a series of rollers until a
smooth paste is formed.  Refining
improves the texture of the
chocolate.dry crumb
(sandlike)raw
chocolate(thick paste)Refine Refining of chocolate requires very
expensive refining rolls that aredesigned to reduce particle size
significantly.  These rolls put a
tremendous amount of energy into the
paste to reduce particle size.  The
particle size goes from the sand-like
size to a talc-like size, 90% less than 25
microns.  This operation in itself takesan unacceptable material and transforms
it into a palatable material.  Flavor
releases and texture are significantly
transformed.
11.  The next process, conching,
further develops flavour and
texture.  Conching is a kneading or
smoothing process.  The speed,
duration and temperature of the
kneading affect the flavour.  Analternative to conching is an
emulsifying process using a
machine that works like an egg
beater.raw
chocolate
(thick
paste)chocolate
(fluid
liquid)Conching The term conching is unique to the
chocolate industry which requires a
unique piece of equipment.  The conche
mixes and kneads the paste to
homogenize and remove volatile
compounds.  The viscosity of the pasteis greatly reduced.G/RO/W/77
Page 14
ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
12.  The mixture is then tempered
or passed through a heating,
cooling and reheating process.  This
prevents discolouration and fatbloom in the product by preventing
certain crystalline formations of
cocoa butter developing.chocolate
(fluid
liquid)liquid
chocolate
(pasty
liquor)Temper Control of crystal formation as the
melted chocolate approaches finished
goods is critical for the production of a
stable, appealing consumer product.  Atempering unit is a sophisticated,
precision piece of machinery that
controls crystal growth.  The liquid
chocolate is first cooled to 78 to 80 F.
being careful not to totally solidify,because chocolate will solidify in an
unstable form at these temperatures.
Turbulent mixing is required throughout
the tempering operation to make sure
the total mass see the same temperatureat the same time.  The crystalline liquid
that is produced during the cooling step
is then heated to 86 to 88 F to melt
unstable crystal s and maintain the
stable crystal seeds. This temperaturemust be maintained for a significant
amount of time to complete the
remaining steps in producing a limited
bar.  The temperature cannot be raised
since the stable crystal seeds will melt,and the temperature cannot be reduced
because the chocolate will solidify
throughout the system.G/RO/W/77
Page 15ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
Ingrediation Most chocolate bars contain inclusions
or fillings.  Viscosity, temper and
proper mechanical action must be
controlled during this step.  Mostinclusions are sensitive to mechanical
action. The correct amount of agitation
so as not to damage the inclusion but
maintain a uniform mix requires unique
equipment design.  Inclusions or fillingswill change the whole flavor profile of
the original chocolate.
 64making cocoa
preparations in
blocks, slabs or
bars, weighing 2kg or less, from
sweetened
cocoa poder or
other cocoa
preparations(1806.31-1806.
90)13.  The mixture is then put into
moulds or used for enrobing fillings
and cooled in a cooling chamber.liquid
chocolate
(pasty
liquor)Depositor or Disbursement of the tempered chocolate
with or without inclusions, out of a
hopper requires weight control and
mechanical actions that do not effect
temper or the inclusions.
Enrobing Enrobing requires a thin chocolate
viscosity because the chocolate forms a
curtain that covers places ofconfections.  Viscosity and temper
control are critical.G/RO/W/77
Page 16
ISSUE # STEPS
(International Cocoa
Organization)Input Output UNIT
OPERATIONCOMMENTS
Moulding The chocolate is deposited into a fixed
form, a mould.  If the chocolate is not
tempered it will never come out of this
fixed form.  The mould has to betemperature controlled.  If the chocolate
enters a cold mould it will solidify too
quickly and the form will never be filled
properly.  If the moul d is too hot, it will
detemper the chocolate.
Retail
chocolate
productsCooling Cooling is done in a very controlled
fashion, typically in a cooling tunnel
with zoned cooling.  The first zone
provides a moderate cooling, 55 to 60 F.
The second zone is always colder than
the first, approximately 50 F.  The third
zone is set slightly higher, 60 to 65 F, tominimize condensation and condition
the bars for demoulding.  Only if the
right crystal formation has been
maintained will the bar demould
properly.  Any fluctuation in temperwill either cause the bar not to demould
or have an undesirable appearance.
14.  The chocolate is then packagedfor distribution to retail outlets.G/RO/W/77
Page 17
Issue No. 106 – Blending Whisky or Other Spirit Drinks
In the production of Canadian rye whisky (classified in subheading 2208.30), a small amount
of Scotch whisky (also classified in subheading 2208.30), as well as some other alcoholic ingredientsof Chapter 22, may be used for flavouring purposes and to achieve a particular character.
Accordingly, Canada is proposing that a rule be developed that would permit the blending of
alcoholic ingredients, i.e., those classified in subheading 2106.90 and Chapter 22, into the alcoholic
beverage products of subheadings 2208.30 through 2208.70, provided that the non-originating
alcoholic ingredients constituted no more than a certain percentage of the alcoholic content of the
final product.  Such a rule would allow, e.g., th e blending of whiskies of subheading 2208.30 or rums
of subheading 2208.40, as well as the blending of alcoholic beverages classified in different
subheadings, e.g., sherry of heading 22.04 and Scotch whisky of subheading 2208.30 with rye whisky
of subheading 2208.30, provided that the final product contained no more than a certain percentage of
non-originating alcoholic ingredients.  The term “alcoholic ingredients” would mean all acoholic
products classified in subheading 2106.90 or Chapter 22.
The percentage that Canada would propose for the non-originating alcoholic ingredients is 10
per cent of the alcoholic content of the good.  Th e 10 per cent maximum would apply to the sum of all
non-originating alcoholic inputs and not only to individual ingredients and the calculation would be
based on the total alcoholic content of the final good.
Proposed Rule:
2208.30-2208.70 A change to any one of subheading 2208.30 through 2208.70 from within
that subheading or any other subheading, including another subheading within that group, providedthat the non-originating alcoholic ingredients constitute no more than 10 per cent of the alcoholic
content of the good by volume.
__________