Canadian officials not surprised by U.S. appeal

Country-of-origin labelling | Ag minister says he expects U.S. to lose its latest challenge of WTO ruling

The United States announced Nov. 28 that it will appeal the most recent World Trade Organization ruling on country-of-origin labelling.

The move surprised few and disappointed many in the Canadian beef and pork industry.

In October, the WTO ruled in favour of Canada and Mexico by determining the U.S. had failed to bring its meat labelling regulations into compliance with international trade rules.

It was the third victory on the COOL file for Canada, and the U.S. appeal is considered to be the last avenue available before Canada and Mexico apply to administer retaliatory tariffs against a list of U.S. goods.

“It was not really much of a surprise,” said Canadian Cattlemen’s Association president Dave Solverson.

“There was a little bit of hope that perhaps the work of the two coalitions down there that are encouraging their government not to appeal, and just make a legislative amendment or repeal, would have an effect. But we pretty much expected them to continue with the process.”

Solverson and CCA staff now plan to attend state meetings next week, starting in Kansas, Iowa and Nebraska, to push for changes to COOL.

Solverson said it would be possible for the U.S. to suspend its appeal if the American “barnyard coalition” of producer and processor groups continues its push.

Livestock and meat related groups in the U.S., as well as groups in states targeted by potential retaliatory tariffs, recently formed the COOL Reform Coalition, which urges American politicians to change COOL.

That hope dimmed with the Nov. 28 declaration of an appeal.

Federal agriculture minister Gerry Ritz and international trade minister Ed Fast issued a joint statement critical of the move.

“Canada is deeply disappointed with the U.S. decision to appeal the WTO ruling on COOL,” the ministers said in a joint statement.

“Canada fully expected the United States to live up to its international trade obligations and comply with the WTO ruling, which reaffirms Canada’s long-standing view that the revised U.S. COOL measure is blatantly protectionist and fails to comply with the WTO’s original ruling against it.

“With this delay, the United States is yet again preventing both of our countries from enjoying the benefits of freer and more open trade and is hurting farmers, ranchers and workers in the United States and Canada.”

The ministers said they expect the U.S. will lose the appeal, an opinion Solverson and the CCA share.

“It could be that when we win again, which we expect to, then our government could begin retaliatory tariffs. That’s not the outcome that we’re hoping for. We’d like to see resolution where we could suspend that action,” said Solverson.

Canada has published its proposed list of goods that would be subject to retaliatory tariffs, although the list has yet to be approved by the WTO.

Ritz has said application of tariffs is not the preferred option, but the government will proceed if the U.S. does not either repeal COOL or make it trade compliant.

The list of goods to which proposed tariffs might apply includes items chosen to affect goods from U.S. states where politicians support COOL. They range from meat, fruit, chocolate and wine to mattresses and office furniture.

The WTO is expected to deal with the appeal this spring. Canada and Mexico could be in a position to apply tariffs by summer if the U.S. doesn’t take any further action to change COOL.

COOL has resulted in losses of an estimated $1.1 billion per year for the Canadian cattle and pork industries since it was implemented. The legislation discourages American processors from buying Canadian livestock because of extra expenses to segregate and label the resulting meat products separately.

There was hope on the part of the two Canadian industries that recent mid-term elections, which saw Republicans gain control of both the House of Representatives and Senate, would result in COOL changes.

That could still happen in the new year, although the two largest general farm groups in the U.S. continue to support COOL.

Solverson said the CCA plans to lobby one of them, the American Farm Bureau, at upcoming meetings.

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