While the fate of the Keystone XL pipeline has garnered most Canadian attention since the U.S. midterm elections gave the Republicans control of Congress, the prospects for resolution of the meat labelling dispute are also under examination.
Last month, a report by a Compliance Panel of the World Trade Organization re-enforced two earlier WTO panel decisions that concluded the U.S. country-of-origin labelling (COOL) program violates international trade obligations by discriminating against imported products.
While the Obama administration didn’t comment publicly on the latest rebuff before the Nov. 4 elections, officials indicated to various media outlets that the decision would be appealed to the full WTO, which would stall Canadian and Mexican threats to impose retaliatory tariffs.
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What happens to COOL when the new Congress takes office remains up in the air.
“I think we got the most favourable result in the election that we could have hoped for,” said John Masswohl, director of government and international relations for the Canadian Cattlemen’s Association. “We already had good support in the House of Representatives for fixing COOL and that remains solid.
“The problem has been in the Senate where Debbie Stabenow, the chair of the agriculture committee, was not interested in a genuine fix,” he added.
With Republicans now in control of the Senate, it’s expected that Pat Roberts from Kansas will head up the Senate agriculture committee. “Kansas is a state that has been acutely hurt by COOL and wants it fixed in a manner consistent with what we want, so we are optimistic that fixing COOL will be a priority for Senator Roberts.
“We will still have a lot of advocacy work to do in D.C., but we think we have better ground to plow now.”
A more cautious interpretation of the election outcome came from Ron Davidson, director, international trade, government and media relations for the Canadian Meat Council.
“COOL is mandated in U.S. legislation,” he said. “The House of Representatives, the Senate and the administration all participate in the development and approval of legislation. The election will result in a change of political party control in only the Senate, one of the three contributors to U.S. legislation.
“Prior to the election, neither the administration nor the House of Representatives had developed or proposed a WTO-compliant resolution to the Senate for approval,” he noted. “Therefore, it is unlikely, in and of itself, that the new composition of the Senate will result automatically in the creation of a WTO-compliant solution.”
The meat industry, which had worked closely with its counterpart, the American Meat Institute for changes to COOL, hopes the Obama administration will work with Congress “on the development and approval of a WTO-compliant solution that will result in fair rules-based trade of both livestock and meat products between Canada and the U.S.”
COOL has devastated Canadian exports of livestock, beef and pork. While Canada has said it will impose $1 billion worth of retaliatory tariffs on American goods, another U.S. appeal to the WTO would delay action until next year.
Canada has been fighting COOL since 2008. The program requires mandatory labels on meat packages identifying where the animal was born, raised and slaughtered.
Canada first complained to the WTO about COOL in 2009. In 2012, the trade body found it not to be in compliance with the U.S.’s international obligations. In early 2013, the U.S. announced changes that it said brought the program into compliance with the WTO. Canada and Mexico said the changes made the situation worse.
In 2013, Canada released a long list of imported American food and consumer products, which could be hit with 100 per cent duties.
Canada’s preferred choice is for Congress to immediately repeal the red meat requirements of the COOL legislation or revise the legislation in a manner that eliminates the need for U.S. cattle buyers to segregate imported from U.S.-born livestock.
