Don’t expect the U.S. country-of-origin labelling dispute to be over any time soon, despite a reported World Trade Organizat ion panel rul ing against it.
A final outcome could still be years away, even if Canada does win the WTO case, said Kevin Grier, a livestock analyst with the George Morris Centre.
“It’s going to take a couple of years at least to get this thing done, assuming it does get done in our favour,” Grier said.
According to media reports, the decision favours Canada and Mexico, which is also challenging COOL, by saying the rule goes against provisions of the WTO’s Agreement on Technical Barriers to Trade (TBT).
Specifically, the ruling repor tedly says COOL unfairly discriminates against imported livestock by adding costs for segregating, thus violating the TBT agreement.
But even if it’s true, a long, complicated process still lies ahead before the COOL case is settled.
First, the panel’s preliminary ruling isn’t even public yet. The WTO issued a confidential copy to the Canadian, U.S. and Mexican governments May 20. The report must be translated before it is officially released. That could occur in July.
Once that happens, the losing country has 60 days to request an appeal. Then an appeal panel is formed to hear the case. A final decision could come in July 2012.
Even assuming the ruling ultimately goes against the U.S., that doesn’t necessarily end the matter.
All the WTO ruling will say is that the U.S. must bring COOL into compliance with its international trade obligations. The U.S. will be given some time to do so. After that, Canada and Mexico may ask for a compliance panel to
determine if the U.S. actually has brought COOL into line with the TBT agreement.
If the panel decides not, Canada and Mexico have the right to retaliate against the U.S. by imposing trade sanctions equal in value to the damage done by COOL.
All of that could take another year or more.
The ball is squarely in the U.S. court if the WTO panel finds against COOL, as reported, Grier said.
The U.S. could modify the rule so packers do not have to segregate animals, as they do now.
Or it could simply refuse to comply, as the European Union did after losing a case against its ban on hormones in imported beef.
“The U.S. could do like the Europeans and say, ‘screw you, even though I lost this thing, I’m still not going to do it,’” said Grier.
“Canada then has to make decisions about whether or not it’s going to respond. And we would have the right to respond.”
Despite the long, drawn-out process, Grier said it’s important for Canada to fight the case out to the end.
Getting COOL thrown out, or at least modified, would eliminate U.S. discrimination against Canadian livestock and American retailers’ reluctance to carry Canadianorigin meat, he said.
“Getting rid of it by default is good because it takes away those negatives that are being imposed on us, such as the need to segregate and sort Canadian livestock, to (treat) them differently. These are real damaging realities that would no longer be there,” said Grier.
“Producers should be looking at this as a long expensive fight. But it’s worthwhile.” [email protected]
– KEVIN GRIER