Ritz backs off on trade challenge over COOL

Wednesday, January 14, 2009

© Copyright AgMedia Inc

by BETTER FARMING STAFF

The American government is easing up on its tough regulations under Country of Origin Labelling, known as  COOL. Canada’s Agriculture Minister Gerry Ritz says it is a breakthrough and put a World Trade Organization action, launched Dec. 1, on hold. Beef and pork producer groups aren’t so sure they will benefit from the changes.

COOL came into effect last September under an interim set of rules. Final regulatory details were released on Monday and take effect March 16. COOL requires U.S. retailers to identify the country of origin of beef, pork and some other products. This isn’t difficult when cattle and pigs were born, raised and slaughtered in the Untied States. It’s more difficult if the animals were born in Canada or Mexico and fed and raised on American farms, or if they were transported across the border and slaughtered immediately.

The first round of regulations required these different categories of animals be segregated and meat labelled differently. Some packing plants quit buying  cattle and pigs shipped from  Canada or limited production runs that included Canadian cattle and pigs.
 
That rule has changed. Categories may be combined in a limited fashion, allowing packers more leeway in sourcing cattle and labelling meat on any given production day.

“With this final rule they have recognized that that (segregation) was a problem and they have given the packers some greater flexibility to source cattle,” says John Masswohl, Canadian Cattlemen’s Association spokesman. Masswohl anticipates producer losses will ease up but not disappear. COOL cost Canadian beef producers an average of $90 a head.

Ontario producers weren’t hurt as badly as their Western counterparts because plants they ship to didn’t turn away Canadian cattle, explains Gord Hardy, president of the Ontario Cattlemen’s Association,
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Gerry Ritz calls the final regulations “tremendous good news” for Canadian producers. They will allow the industry to “get back to normalcy.”

Canadian government plans to “shelve our concerns at this point but we will continue to assess the impact of COOL as it moves along,” he says, referring to a Dec. 1 request for consultations with the United States, the beginning of a World Trade Organization action. For now, the Canadian government’s trade complaint will be held in abeyance.

Martin Rice, executive director of the Canadian Pork Council wonders how much, if any, relief Canadian producers will experience from the adjusted regulations. He estimates the country’s hog industry is losing a minimum of $500,000 a week just because of COOL.
“We’re having many, many reports of people having to accept $5 to $10 less per feeder pig,” he says.

Rice says market gains depend on U.S. retailers’ labelling routines. “If they accept more than one label then I think we’ll be in good shape.” If (retailers) stick with a Product of the United States label, “we’re still going to be looking at significant discrimination against Canadian animals.”

Bridgette Dyce, a business intelligence officer with Ontario Pork, says a new political administration taking over in the United States will be able to reevaluate COOL, she says. Doing so, however, would be complicated. “It would have to be something serious before they would start to overhaul,” she says. BF