by SUSAN MANN
The United States could face trade retaliation from Canada if it doesn’t make changes to a recent proposal modifying its country of origin labelling legislation.
The Canadian beef and pork industries and the federal government are saying the United States’ proposed changes to COOL, made public March 8, will increase discrimination against exports of cattle and hogs from Canada and cause more damages to the Canadian industry.
But Canada wants this matter resolved and “get back to where we have normalized trade between our two countries,” says Dennis Laycraft, executive vice president of the Canadian Cattlemen’s Association. Canada and the United States have the largest two-way trade in beef and live cattle in the world.
Federal Agriculture Minister Gerry Ritz says in a March 8 statement the government “will consider all options including retaliatory measures should the U.S. not achieve compliance by May 23 as mandated by the World Trade Organization (WTO).”
The United States was given until May 23 to comply with a July 2012 decision of the WTO Appellate Body that states the Country of Origin Labelling (COOL) law discriminates against non-U.S. born and raised livestock.
Speaking in favour of the changes, Agriculture Secretary Tom Vilsack says in a United States Department of Agriculture press release the USDA “expects that these changes will improve the overall operation of the program and also bring the current mandatory COOL requirements into compliance with U.S international trade obligations.”
Laycraft says the American proposal would require even more segregation in plants, more record keeping on imported cattle and products from them and even more labelling of specific products compared to the legislation that’s in place now. All of those measures will make American processors reduce the amount of Canadian and Mexican cattle and hogs they import because of the additional costs associated with it.
He says the American proposal has a 30-day comment period and hasn’t yet come into effect, but if the United States doesn’t make changes to it by May 23 then Canada could go back to the WTO and argue they haven’t complied with the ruling. Canada could then request a WTO Compliance Panel look into the matter.
“We would argue that they have not complied and then at that stage we potentially could also be looking at trying to determine the amount of either compensation or retaliatory duties that would come into effect as a result of their non compliance,” he says.
The Canadian Pork Council says in a March 8 press release lost live swine and beef cattle sales are more than $1 billion annually since COOL became mandatory in the fall of 2008. The council also says to comply with WTO ruling, the United States needs to change its COOL law and not just fiddle with the regulations as they’re doing now. Spokesmen for the council couldn’t be reached for comment.
Laycraft says there could be negotiations to determine compensation “to address the unfair treatment of the imported products” or there could be duties placed against a variety of U.S. products that would be “equal to the amount of discrimination that there is against Canadian imports.”
The duties could be applied against American meat products and whatever else the Canadian government chooses to apply those duties to, he says.
Laycraft says U.S. meat groups, such as the National Cattlemen’s Beef Association, have also condemned the proposed changes.
Even an American meat trade association has panned them. J. Patrick Boyle, president of the American Meat Institute, which represents U.S. red meat and turkey processors, says in a March 11 press release that only the government “could take a costly, cumbersome rule like mandatory country of origin labelling and make it even worse as it claims to fix it.”
Similar to Canadian industry representatives, Boyle says the new proposal is “even more onerous, disruptive and expensive than the current regulation.” If the proposal becomes mandatory, it will create more excessive costs that will be passed on to consumers.
For example, current labels from plants and retailers say ‘product of the U.S.’ But under the new proposal those labels would change to ‘born, raised and slaughtered in the U.S.’
Boyle says the bottom line is mandatory country of origin labelling is “conceptually flawed in our view and in the eyes of our trading partners.” BF