Famous Canadian construction expert Mike Holmes has a useful motto: Make it right.
Too bad he doesn’t have the ear of the United States Department of Agriculture, which has failed to make right its country- of-origin labelling rules so they do not discriminate against Canadian cattle and hogs.
Earlier this month, the U.S. tabled proposed changes to COOL, ostensibly to comply with a World Trade Organization ruling that existing legislation was unfair to other countries.
But rather than improve COOL, the proposed changes will make it worse.
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They appear to impose an even more onerous labelling regimen that would increase costs to U.S. packers and further discourage them from buying Canadian hogs and cattle.
They would force segregation of U.S.-born and Canadian-born animals so food labels would indicate each stage of life — where the animals were born, raised and slaughtered. That would replace the one dual-country label now allowed.
Is this crock of official lard (another version of COOL) a political tactic meant only to temporarily appease Democratic supporters of the failed legislation, after which COOL will simply die a quiet death? Hog and cattle producers may hope so but only certain American politicians know the answer.
And while we await that answer, Canadian politicians and those in the livestock industry must prepare retaliatory measures should the U.S. fail to make satisfactory changes to COOL by the May 23 deadline.
Canada is not without clout in the matter. This country was the largest market for U.S. beef last year in terms of volume — 467 million pounds — and value, at an estimated $1.48 billion.
The U.S. sold about 520 million lb. of pork to Canada in 2012, valued at $856 million. If retaliatory measures were to curtail the flow of U.S. meat into Canada, our southern neighbours would feel the pinch.
Analysis shows COOL has cost the Canadian livestock industries about $1 billion per year since the legislation was imposed in early 2009.
Retaliatory tariffs are allowed to be equal to the calculated damage under WTO rules, so big dollars are involved, should it come to that.
But it shouldn’t come to that, and for reasons even beyond economic damage to vital Canadian agricultural industries.
Alteration or elimination of COOL has benefits for Americans too, and many of the major U.S. livestock groups know it.
COOL has failed in its goal of promoting purchases of American meat. Most U.S. consumers aren’t even aware of the program.
At the livestock industry level, many U.S. packers are struggling as the recession drags on. Several have been processing Canadian cattle and hogs for years and are still running at less than capacity.
More onerous labelling rules could force refusal of Canadian livestock entirely because of extra expense. That, in turn, could push marginal processing plants into closure, damaging the U.S. economy and eliminating jobs.
Meat — safe, high quality beef and pork from animals raised under virtually the same conditions in the U.S. and Canada — could become more expensive for consumers.
Federal agriculture minister Gerry Ritz was characteristically direct in his response to COOL changes. He said the government will consider all options, including retaliatory measures, should the U.S. not comply with WTO directives by May 23. He must keep that firm stance.
Canada has a lot to lose if satisfactory changes aren’t made to COOL. But if it flouts WTO rulings, the U.S. international trading powerhouse has even more to lose.
The solution? Make it right.
