COOL decision down to the fine points

An arbitration panel heard widely different interpretations of how much damage was done


Canada has made its final pitch to a World Trade Organization panel on the billions of dollars of damage beef and pork producers say they have suffered due to the U.S. country-of-origin labelling (COOL) program.

Now it awaits a decision on what level of retaliatory tariffs it can impose on imports of American food and consumer goods.

The presentation from Canadian representatives and a counter-argument from the U.S. were heard in Geneva Sept. 14. The next step will be written questions to the two countries from the WTO panel studying the dispute. A final decision could come by Nov. 27.

The Canadian presentation “relied on facts, rather than the Americans’ hypotheses and assumptions which attempted to trivialize the enormous harm COOL has imposed on Canada’s livestock industry,” said Rick Bergmann, chair of the Canadian Pork Council.

Almost six years have passed since Canada first protested COOL to the WTO as a violation of international trade rules that burdened its producers with $3 billion a year in lower prices and extra costs, said Bergmann, who farms near Steinbach, Man.

“The WTO has ruled four times that COOL is discriminatory. The United States needs to deal now with fixing the faulty legislation before allowing steep tariffs to be imposed on a wide swath of its exports to Canada.”

John Maswohl, vice-president of the Canadian Cattlemen’s Association, said the Canadian presentation “including the outside economist who prepared our analysis, did an outstanding job and we continue to feel very confident and positive about our numbers.”

There is no appeal to the WTO’s final decision, he noted. “Once it comes, it will be up to Canada to act on retaliation unless the U.S. has taken legislative action on COOL that would cause us to decide we no longer need to retaliate.”

The office of the United States Trade Representative has claimed that COOL has only cost Canadian producers about US$43.2 million a year.

It says Canada made fundamental legal errors and numerous flaws and erroneous assumptions in developing its damage claims.

“The chief economist for the United States Department of Agriculture has stated that COOL is costing the American industry alone some US$2.6 billion annually,” said Agriculture Minister Gerry Ritz. “Canada is confident in our assessment that COOL is causing more than $3 billion in annual damages to the Canadian cattle and hog industry.”

Ritz has repeatedly urged the U.S. to repeal COOL to avoid the retaliatory duties. A handful of senators blocked a motion approved by the House of Representatives to do that. Instead they offered a modified plan, which Canada had dismissed as irrelevant and misleading.

Bergmann said the costs of complying with COOL “are so onerous for the U.S. food distribution system that the number of U.S. plants willing to purchase Canadian-born pigs fell from over 25 prior to mandatory COOL to just a handful today.”

The Canadian duty list will include beef, pork, apples, rice, corn, maple syrup, wine, jewelry, wooden furniture and mattresses. Ritz says Canada will aim its tariffs to goods coming from states whose Senators opposed ending COOL.

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