Updated: 3:45 p.m CST Friday November 18
Canadian cattle and hog sectors are evaluating the effects of a World Trade Organization ruling.
The WTO has ruled in favour of Canada and Mexico’s complaint against mandatory country of origin labelling legislation affecting beef and pork imports entering the United States.
The trade panel was unanimous in its decision, released in Geneva, Switzerland on Nov. 18.
The United States has 60 days to appeal the ruling although negotiations to change the rule are possible. The case is not likely to appear before the appeals body in Geneva until next spring at the earliest.
If there is an appeal and the win is upheld, the U.S. will be given time to comply. If the U.S. fails, Canada has other means to assert its win, said Ed Fast, minister of international trade. That could mean tariffs on American imports.
“We are confident in the long run our relationship will remain sound.”
The ruling supports Canada’s position that parts of the mandatory labelling law discriminate against cattle and hogs imported into the U.S. from Canada to the detriment of Canadian producers.
The Canadian Cattlemen’s Association and Canadian Pork Council argued that country of origin labelling (COOL) increased costs for U.S. companies that import live Canadian animals and reduced the competiveness of Canadian livestock in the U.S. market. The WTO confirmed that COOL has had this effect.
“While winning this case as soundly as we have is extremely gratifying, it is only a means to an end and not an end in itself,” said Travis Toews, president of the Canadian Cattlemen’s Association.
The law forced American processors to segregate livestock at slaughter plants and keep meat products separate so they could be traced and propely labelled. The costs were ultimately passed back to producers.
The CCA estimated early on the law cost Canadians $80-$100 per slaughter animal.
First posted: 11:58 a.m CST Friday November 18
Canada has won its case at the World Trade Organization against the United States Country of Origin labeling laws.
Ed Fast, minister of international trade and minister for the Asia-Pacific Gateway, and Gerry Ritz, minister of agriculture, today said Canada has won a clear victory as the WTO ruled that the U.S. COOL measure is inconsistent with its WTO trade obligations.
“This decision recognizes the integrated nature of the North American supply chain in this vitally important industry,” said Fast at a news conference in Airdrie, Alta.
“Removing onerous labeling measures and unfair, unnecessary costs will improve competitiveness, boost growth and help strengthen the prosperity of Canadian and American producers alike.”
Mexico joined Canada in the WTO challenge. Thirteen WTO country members joined as third parties in the dispute.
When COOL came into effect in 2008 it sharply reduced Canada’s livestock exports to the U.S.
Canada argued that COOL forces its livestock exporters to the U.S. to follow a lengthy labeling and tracking system with an unnecessary paperwork burden and red tape. It has led to disintegration of the North American supply chain, created unpredictability in the market and imposed additional costs on producers on both sides of the border, Canada argued.
The U.S. trade representative’s office says it is considering all options including an appeal of the decision.
“Although the panel disagreed with the specifics of how the United States designed those requirements, we remain committed to providing consumers with accurate and relevant information with respect to the origin of meat products that they buy at the retail level. In that regard we are considering all options, including appealing the panel’s decision,” Andrea Mead, press secretary for the Office of the U.S. Trade Representative, said in a news release.
The panel affirmed that the United States has the right under WTO rules to adopt COOL requirements.
However, it disagreed with the way the U.S. designed its requirements and determined that they provide less favorable treatment to Canadian and Mexican livestock. Also, the panel determined that the U.S. COOL requirements fail to fulfill their consumer information objective because the information included on the labels is not clear enough in all instances.
