The Canadian government is appealing again to the World Trade Organization to force changes in U.S country-of-origin labelling rules that beef and pork exporters say are billion dollar trade barriers.
While the industry projects costs into the hundreds of millions of dollars, it also expects the latest government appeal to take a year or more to end in a resolution.
On Aug. 19, agriculture minister Gerry Ritz and trade minister Ed Fast announced that Canada is asking the WTO to establish a compliance panel to determine if the United States met its WTO-ordered change in COOL rules to make them compatible with international trade rules. The U.S. had a May deadline to amend the rules.
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Rabobank says it will be two more years before North American grain farmers achieve break-even due to “monster” supplies and “sticky” crop input prices.
Although Canada, with the support of Mexico, won a WTO ruling declaring that U.S. labelling rules are trade barriers masquerading as consumer education, Washington responded by making changes that Canada says makes the rule more onerous.
Canada has threatened tariff retaliation but must await a final WTO ruling before tariffs can be applied.
“We had hoped to avoid having to resort to the WTO to resolve this matter,” the ministers said in an Ottawa-issued statement.
“However, despite consistent rulings by the WTO, the U.S. government continues its unfair trading practices which are severely damaging to Canadian industry and jobs.”
By requiring labels that identify any foreign pork or beef in products, Canadian exporters say their ability to sell product into the U.S. has been diminished, some U.S. packing plants dependent on Canadian animals have closed and prices have been discounted while losses mount.
Canadian Pork Council communications official Gary Stordy said the CPC supports the government move, even though it could take a year or more to resolve.
The United States can and is expected to block creation of a new committee to examine its response to the earlier WTO ruling at the next WTO dispute resolution committee meeting.
It means the compliance committee likely will not get started until the autumn.
“This may take a year or more to go through but these are the rules and it is a path we have to go down,” Stordy said.
CPC said in a statement of support for the government that livestock sector losses have reached at least $1 billion because of COOL.
The CPC said hog exports to the U.S. have fallen by 41 percent and exports of cattle by 46 percent since the rule took effect in October 2008.
