Deadline nears for COOL changes

Tuesday, December 4, 2012

by SUSAN MANN

The United States has until May 23, 2013 to retool its country of origin labelling law but Canadian producers should not expect an exact re-emergence of the pre-COOL North American marketplace, warns a Canadian Pork Council spokesman.

“It has to go back to a way, though, where our animals are not discriminated against,” says executive director Martin Rice following the Tuesday release of a World Trade Organization arbitrator’s deadline for the United States to bring its controversial legislation into compliance. The decision is dated Nov. 22 and is not subject to appeal.

Rice says the time allocated is enough for the United States to adjust the portions of COOL that discriminate against Canadian and Mexican born livestock in the U.S. market. New legislation will likely have to be passed, he says.

Martin Unrau, president of the Canadian Cattlemen’s Association agrees legislative changes will need to be made: “We see the May 23 timeline as being positive but we have to work towards some type of an agreement so we can get what we need out of this and so that we can be satisfied.”

He says their hope is once the changes are implemented, Canadian cattle won’t face discrimination in the American market “and we’ll be able to have them processed in the way it was before COOL was implemented.” Canadian Cattlemen’s representatives are working with their U.S. counterparts and allies “to try to come to an agreement on how to move forward with this situation.”

In June, the WTO Appellate Body confirmed a November 2011 panel decision that the U.S. COOL legislation discriminates against Canadian livestock. It also noted the legislation is inconsistent with the World Trade Organization obligations of the United States. Canada argued the United States should only be given six months to comply, starting from July 23. That’s when the WTO Dispute Settlement Body adopted the Appellate Body report. Mexico proposed eight months; the United States requested 18 months. The arbitrator ruled that 10 months is a reasonable period of time for the United States to make changes.

If the United States doesn’t make the necessary changes by the deadline, Rice says Canada will launch a complaint to the WTO and “we would then look at alternatives that would involve, unfortunately, retaliation.” That retaliation would be “quite substantial.” Trade in Canadian and Mexican feeder and slaughter cattle and pigs was more than $1 billion a year before COOL came into effect in 2008, he explains.

Between 2008 and 2009 Canadian exports of feeder cattle declined 49 per cent while exports of slaughter hogs went down by 58 per cent. “COOL led to the disintegration of the North American supply chain, created unpredictability in the market and imposed additional costs on producers,” states a Tuesday federal government news release.

Agriculture Minister Gerry Ritz and International Trade Minister Ed Fast state in the release that the government “stood firm with our cattle and hog producers against the unfair country of origin labelling of the United States. The WTO Appellate Body has recognized the integrated nature of the North American supply chain and marked a clear win for our livestock industry.”

The Cattlemen’s Association says in a Tuesday press release the current impact of COOL on cattle and beef product trade is an estimated $639 million per year.

Rice says that by implementing the WTO decision, the United States will remove some of the impediments that result in discounts of Canadian livestock as well as their refusal at certain plants. “It will certainly lessen any discrimination against Canadian live animals” and restore the conditions of one single North American market for hogs and beef, he says. BF