Canadian cattle and hog producers are getting their Christmas gifts early this year.
The U.S. Congress repealed country-of-origin labelling legislation Dec. 18 as part of a larger omnibus bill, averting a potential trade war in the form of more than $1 billion in retaliatory tariffs about to be imposed by Canada and Mexico.
At press time, the bill had yet to receive presidential assent but cattle and pork association leaders were ready to celebrate once the ink was dry on Barack Obama’s signature.
“After all these years, it’s wonderful news,” said Canadian Cattlemen’s Association president Dave Solverson about repeal of labelling legislation that the CCA and others have fought since 2008.
Solverson noted the support of the federal government, past and present, in pressing the issue through the World Trade Organization. The WTO ruled in Canada’s favour four times, supporting the contention that COOL violated international trade rules.
That point was key for Canadian Meat Council executive director Ron Davidson.
“Countries should abide by their international trade obligations, and given the consistent WTO decisions on this, I think the international trade obligations were very clear,” he said.
“If the U.S. is going to repeal those measures, I think it will make everybody happy because they will then be following the rules, hopefully.”
Canadian Pork Council chair Rick Bergmann said COOL’s repeal means the end of discriminatory pricing.
The legislation required U.S. processors to label meat according to the source animals’ place of birth and death. The need to segregate Canadian cattle and pigs and then label them incurred extra costs that discouraged their sale in the United States.
Bergmann, who raises isowean pigs, said Dec. 18 that he had already noticed better price offers in the U.S.
“That tells me that American producers have been talking with their processing plants that are in need of animals,” he said.
“There’s probably some speculators out there in the U.S. that say, ‘yes, common sense is going to prevail at the end of the day so let’s get these animals in now.’ ”
Solverson said he is hopeful the value chain will soon return to pre-COOL conditions.
Objections to COOL among U.S. cattle and hog producers and processors will be key to that, and they were also key to the repeal, he added.
“When I was lobbying in the U.S. last week, I said this is a very unusual trade dispute because industry on both sides of the border was on the same side on this issue,” he said.
“Outside of a couple of small protectionist groups, the whole U.S. cattle industry and beef processing and the unions that work in the plant, everybody wanted COOL gone .… It wasn’t just Canada and Mexico against the U.S. It was the industry against the administration, is what it was.”
Davidson said he was relieved retaliatory action will not be necessary.
“The intent was not ever a desire to retaliate. The intent was to have the rule rescinded.”
The WTO ruled that trade damage to the Canadian red meat industry because of COOL amounted to $1 billion annually, and both international trade minister Chrystia Freeland and agriculture minister Lawrence MacAulay reiterated intentions Dec. 16 to impose retaliatory tariffs if it was not repealed.
However, Solverson said the cost of COOL has been far greater than dollar figures indicate.
“The cost has been significant on the dollar value but also if a producer has been unable to weather the storm of what COOL has created,” he said.
“That’s a pretty deep cut on our farms.”
He said COOL has been largely responsible for a 25 percent contraction in the domestic cattle herd.