Appeal upheld | Canadian livestock producers pleased with WTO decision on labelling provisions
Canada’s pork and beef industries are claiming victory in an ongoing trade battle over U.S. country-of-origin labelling.
Last week, an appeal body of the World Trade Organization released a report on COOL measures and determined that mandatory labelling provisions discriminate against Canadian livestock producers.
Under COOL, meat that originates in Canada but is shipped, fed, finished, packaged or sold in the United States is required to carry mandatory labels informing consumers that the meat they are buying did not originate in the U.S.
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Last week’s ruling confirmed that mandatory COOL measures put foreign livestock producers at a competitive disadvantage in the U.S. market.
The ruling, made public June 29, is not subject to further appeals. It gives the U.S. up to 15 months to comply and does not immediately require that American labelling rules be altered.
In Canada, beef and pork industry groups lauded the decision, saying COOL was costing the Canadian meat and livestock industries hundreds of millions of dollars per year because of lost markets and reduced exports of live animals to U.S. feedlots, finishing barns and slaughterhouses.
“This is a great outcome for Canada,” said Canadian Cattlemen’s Association president Martin Unrau.
“COOL has affected billions of dollars of commerce in cattle and beef products since it was implemented in 2008.
On an individual basis, COOL has cost Canadian cattle producers at least $25 on every animal that is sold, regardless of whether it is sold in Canada or the United States.”
Jean Guy Vincent, president of the Canadian Pork Council, offered a similar view, suggesting COOL provisions since 2008 had cost the Canadian pork industry roughly $1.4 billion in lost hog exports to the United States.
“After all this time and after so much damage to our interests, this is such sweet music to our ears,” said Vincent.
“The CPC will be working with our American counterparts and other U.S. stakeholders to help find a timely and effective legislated end to this irritant.”
U.S. officials hailed other parts of the June 29 ruling, saying it affirmed the American industry’s right to adopt country-of-origin labels, even though the U.S. will have to change how it operates the COOL program.
Although mandatory country-of-origin labels contravene existing trade laws, it is widely believed that U.S. meat processors will still have the option of using the labels on a voluntary basis.
Proponents of country-of-origin labels argue that U.S. consumers have a right to know where their meat products come from.
They also contend that country-of-origin labels are primarily intended to educate American consumers and ensure that they are making informed choices at the supermarket.
Although last week’s decision was viewed as a major trade victory for Canadian hog and cattle producers, there are still lingering questions about what steps U.S. legislators are willing to take to comply with the WTO ruling and how soon American labeling regulations will be amended.
At a June 29 news conference near Dundurn, Sask., federal agriculture minister Gerry Ritz acknowledged that the WTO ruling may not result in overnight changes for the Canadian livestock industry.
However, he said U.S. legislators are already facing criticism from some stakeholders in the U.S. livestock sector, who have raised concerns about reliable supplies of slaughter animals and the extra costs involved with segregating Canadian animals.
Ritz said he is encouraged by early signals from U.S. legislators, which suggest that corrective measures will be taken in a timely manner.
“There will be a period of transition going back to normalcy and we’re hopeful that that will be as (short) as possible,” Ritz said.
“I certainly think they are (willing to comply). They believe in rules-based trade just as we do and the rules have been clearly defined by the appellate (ruling). We continue to work with our American counterparts at every level.”
COOL regulations became mandatory in the U.S. in March 2009.
About six months later, Canada requested that a WTO panel rule on the legality of the labels.
The WTO panel released its final report in 2011, and in March 2012 the U.S. appealed several findings in the report.
Last week’s ruling by the WTO’s appeal body upheld some parts of the report but reversed one important finding that suggested COOL fails to fulfill its goal of providing consumers with information on origin.
The U.S. highlighted that reversal in its response.
“We are pleased with today’s ruling, which affirmed the United States’ right to adopt labelling requirements that provide information to American consumers about the meat they buy,” U.S. trade representative Ron Kirk said in a prepared statement.
“The Appellate Body’s ruling confirms that families can still receive information on the origin of their meat and other food products when they shop for groceries.”
