The Canadian livestock industry is cheering a Canadian government decision to take the United States to world trade court in a challenge to its country-of-origin rules.
On Oct. 7, Ottawa announced that it will request a World Trade Organization dispute settlement panel on COOL at an Oct. 23 meeting in Geneva.
An expected American veto of the first request likely means the panel will not be established until a Nov. 20 meeting. The Canadian Cattlemen’s Association estimates that with hearings, possible appeals and other potential delays, a WTO ruling could come in mid-2010 with final implementation by mid-2011.
“The WTO process will take a long time but the CCA believes there is no other option,” the association said in an Oct. 7 statement. It estimated that COOL has cost the cattle industry $250 million during the past year in lower prices and increased costs.
Canadian Pork Council president Jurgen Preugschas also praised the announcement.
“Country-of-origin labeling has been a major factor why many Canadian producers are having to exit the hog industry and has cost the pork industry many millions of dollars,” he said Oct. 7.
Agriculture minister Gerry Ritz said in an interview the government reached the “tipping point” in deciding to formally challenge the American rule after talks with U.S. officials failed and Canadian industry provided evidence that the COOL is costing money and U.S. market share.
“I’m still hopeful we can work it out with the U.S. but meanwhile, we will use the WTO tools available to pursue this,” he said in Ottawa. “I am confident we will win.”
In Washington, agriculture secretary Tom Vilsack and trade representative Ron Kirk issued a statement regretting the Canadian decision and vowing to try to settle the dispute “amicably” through negotiation.
“We believe that our implementation of COOL provides information to consumers consistent with our WTO commitments,” they said. “Countries have agreed since long before the existence of the WTO that country of origin labeling is a legitimate policy. It is common for other countries to require that goods be labeled as to their origin.”
The Canadian gripe with the American rule is that it requires label verification of where the animal was born and not just the country where the carcass was processed into meat products, usually the U.S.
CCA president Brad Wildeman said in the statement that American consumers have no problem purchasing Canadian-labeled product.
But importers and packers often avoid Canadian animals or price-discount them because of the extra cost in labeling or segregating American and Canadian-born animals in the slaughter and processing plants.
“There is both a hit on sales and some price discounting,” said Ritz.
In addition, the U.S. administration has not said if new tougher rules will become mandatory this autumn and that creates market uncertainty.
