Under intense pressure from Canadian livestock exporters, trade minister Stockwell Day has announced Canada will renew its World Trade Organization challenge of U.S. country-of-origin-labelling rules.
During an April 27 meeting in Washington with U.S. trade representative Ron Kirk, Day said he gave notice that Canada will soon take the first step of requesting 60 days of consultation through the WTO. If the consultation is unsuccessful, Canada can then ask for creation of a formal dispute resolution panel.
A formal announcement of the commencement of the 60 days has not yet been made.
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“The papers are in the process,” Day told reporters.
“I can’t give you the hour and the actual day but we’ve given the heads up that we’re moving ahead with that. It’s imminent.”
U.S. agriculture secretary Tom Vilsack asked the American industry earlier this year to voluntarily go beyond the COOL rule implemented in March. If not, he said, the added requirements could be made mandatory in the fall.
Since then, Canadian cattle and hog industry have pressed Ottawa to revive a WTO challenge that was suspended earlier this year when it appeared Canada had won concessions.
Canadian Cattlemen’s Association and Canadian Pork Council leaders have estimated that with some American packers or feedlots refusing Canadian animals and others offering discounted prices because of COOL, the cost could be as much as $90 per head of beef cattle and substantial for hogs.
They consider it American protectionism.
During a May 1 visit to Saskatchewan, prime minister Stephen Harper said he is troubled by the American action.
“They say they are pursuing it only on a voluntary basis but we’re not quite convinced those are the facts when you actually look at how they’re pursuing that,” he told reporters and farmers.
“So we’re looking at an additional round of consultations and we are sending signals we are prepared to take action unless our concerns are addressed.”
He said this type of protectionism could lead to a trend that could sustain the current global recession.
“This is not in the interests of Canada or Canadian agriculture,” he said. “It’s not in the interests of American agriculture or the United States either. We’re going to keep a very close eye on these things.”
Day said Canada had requested an explanation about the intention of the expanded COOL demands and how the request for voluntary compliance would work.
“They have not defined it so it’s one of those areas where I informed ambassador Kirk that we will move forward now with WTO consultation,” he said.
“That means it moves into a 60-day period where the situation is looked at in light of Canada’s concern and ambassador Kirk understood that that’s our position.”
CCA international relations director John Masswohl said he expects the consultation will end in early July and Canada will request and receive agreement to create a disputes panel by September.
A decision could come within a year and assuming appeals, a final result within two years.
Masswohl said it is an important step.
“I think this will make our complaints a bit more real for folks we talk to in Washington.”
He also said there is uncertainty about the future of Villsack’s call for the industry to voluntarily be tougher than the rules require or else.
The American industry is largely ignoring the “or else” and complying with the letter of the COOL rules.
“So what is Vilsack’s intention?” Masswohl said. “Is he going to back down? If so, it would be good if he said that and ended the uncertainty.”
