With another panel review in the works, Canada’s Country-of-Origin Labelling dispute with the United States has entered its next phase in the World Trade Organization dispute resolution process.
The WTO announced Sept. 27 that at Canada’s request, the issue will be referred back to the original dispute resolution panel that last year found COOL in contravention of international trade rules against protectionism.
The issue is whether changes made by the U.S. earlier this year meet the criterion for change set out by the panel report last year.
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Canada, supported by Mexico, called for a review because they argue that U.S. changes actually make the COOL rule more restrictive.
The United States insists its changes comply with WTO demands.
“The U.S. said that its final rule had brought it into full compliance with the (WTO panel) recommendations and rulings but was ready to rebut any claims regarding its compliance measures,” said a WTO statement on the new panel review.
The dispute resolution panel is expected to spend months assessing the claims and counter-claims.
If it finds that the U.S. has not complied, it would open the door for Canadian tariff retaliation of as much as $1 billion against targeted imports from the U.S.
That would not happen at least until mid-to-late 2014.
Canada’s beef and pork industries calculate the requirement that products be labeled in the U.S. market if there is any Canadian content has reduced demand from food companies not willing to pay the extra cost of labeling and reduced demand for Canadian animals in packing plants not willing to pay the costs of segregating.
They say the rules have cost the Canadian industries more than $1 billion in prices or sales.
While Canada and Mexico argue COOL is protectionism, the U.S. says it is consumer education.
So far, the WTO has sided with the critics.
