Canada Wins WTO case on US Country of Origin Labeling (COOL)
Sunday, November 20, 2011
Last Friday, November 18, 2011, the Canadian Pork Council released a press release responding to the announcement made by the Federal Government that Canada has won the World Trade Organization Case on US Country of Original Labeling. The Canadian Pork Council clearly stated that Canadian pork producers welcome the WTO Panel decision on COOL which eliminates trade illegal elements of COOL legislation as it applies to imported livestock.
The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, and the Honourable Gerry Ritz, Minister of Agriculture met at 9:30 a.m. in Airdrie, Alberta with livestock producers and processers to announce the clear victory for Canada’s livestock industry represented by the WTO ruling that the US Country of Original Labeling measure is inconsistent with its WTO trade obligations. Present at the announcement was Jorgen Preugschas, Canadian Pork Council Chairman. Preugschas stated “We welcome this ruling and CPC congratulates the Government of Canada, its legal team and dedicated government officials who provided unflagging support through more than two years of intensive effort.” Minister Fast reiterated stating “This decision recognizes the integrated nature of the North American supply chain in this vitally important industry. Removing onerous labeling measures and unfair, unnecessary costs will improve competitiveness, boost growth and help strengthen the prosperity of Canada and American producers alike.”
The US COOL measure had forced the livestock industry in Canada and other countries that trade with the US to go through a lengthy labeling and tracking system with an unnecessary paperwork burden and additional 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. The panel agreed with Canada that imported cattle and hogs from Canada were ‘like products’ that were discriminated against by the COOL measure. They were accorded less favorable treatment mainly because the COOL measure necessitates segregation of meat and livestock according to origin, which results in higher costs for those throughout the supply chain in the US who use Canadian born livestock. Thus the panel determined that the COOL measure modified the conditions of competition to the detriment of the Canadian born livestock. This finding is specific to muscle cut labels, not the ground meat label.
In December, 2008 Canada and Mexico initiated dispute settlement proceedings against the United States related to country of origin labeling (COOL) requirements for meat products. The Canadian Pork Council and its members from Ontario and Manitoba worked in collaboration with the Canadian Cattlemen’s Association to provide the analysis to support the government’s request for the WTO to appoint a panel to look into whether these new U.S. labeling requirements were a violation of international trade laws. The industry believed the legislation restricted market access and constituted a technical barrier, including to the movement of live swine into the U.S. market. The Panel report, as released to the public this morning, “vindicates our objections”, said Canadian Pork Council (CPC) Chairman Jurgen Preugschas.
Karl Kynoch, Chair of Manitoba Pork, explained that “the impact of the COOL measure on Manitoba exports of weanlings was immediate and dramatic. From 2007 to 2010, weanling exports declined 30% in volume and at least $5-10 per animal in value.” Mr. Kynoch explained that “U.S. feeders had to cope with extra recordkeeping and administrative costs when using Canadian piglets and feeder animals, combined with retailer decision to sell only pork from animals born, bred and slaughtered in the USA had a devastating impact on Manitoba hog producers. The Panel has found that these additional recordkeeping requirements are inconsistent with U.S. WTO obligations.”
Wilma Jeffray, Chair of Ontario Pork, who raises hogs and cattle near Belmore, Ontario, explained that “The COOL rule has limited the number of plants processing Canadian hogs, thereby complicating the logistics of moving animals from farm to processing plants. These were contributing factors to the nearly 60% drop in market hog exports from Ontario to the US from 2007 to 2010. We call on the US administration to comply with the WTO ruling.”
While the Panel decision may be subject to review by the WTO Appellate Body, CPC will be working with like-minded groups in the U.S. to find a meaningful solution without further litigation.
“There has been considerable damage to our exports – for no reason”, said Mr. Preugschas, who farms at Mayerthorpe, Alberta. “The North American hog industry is highly specialized, and was very integrated before COOL. We need to try to get back to normal as soon as possible.”