Yellowknife (Apr 02/03) - The Competition Bureau of Canada won't change the way it defines a 'Canadian' diamond any time soon.

The GNWT has been critical of the Bureau's definition of a Canadian diamond as one 'mined in Canada.'

The GNWT wants that changed to `mined, cut and polished in Canada.'

But that would conflict with existing international trade agreements negotiated by the government of Canada, a Bureau legal analyst said Monday.

"That includes the North American Free Trade Agreement," said Marie-France Gauvreau, a law officer with the Bureau in Hull, Quebec.

Gauvreau said the Competition Bureau reviewed the diamond definition at the GNWT's request last year.

"We retained a trade law expert to look at the consistency of our position in line with other trade agreements.

"We concluded that there aren't sufficient grounds to alter our position. In fact, we were advised that if we did so, it would go against other trade agreements negotiated by Canada."

Most of the diamonds mined in NWT go to offshore cutting works for finishing, but can still be sold as `Made in Canada.'

As the GNWT sees it, that misleads consumers and leaves the industry vulnerable.

"You have the potential, if not the reality, of Canadian diamonds being sold that aren't," said the GNWT's Martin Irving last week.

Gauvreau said the Bureau also concluded that "most of the cost in producing a diamond is in its extraction" rather than value-added secondary manufacturing.

That factors into the way it is defined, she said.

The Bureau also disputes the GNWT's assertion that the existing definition misleads consumers.

Most believe a Canadian diamond is one that is mined in this country, said Gauvreau.

"We consulted consumers and (while) the results were mixed, the highest percentage said that a Canadian diamond is one that is mined in Canada."

The Competition Bureau has no plans to revisit the definition without further information to justify a review, she said.