The Obama administration has dashed hopes for a rational settlement in the dispute with Canada and Mexico over a WTO ruling criticizing Washington’s mandatory country-of-origin labelling rules.
A spokeswoman for the U.S. Trade Representative’s Office announced March 23 that the U.S. would appeal the decision. It waited until almost the last minute to go the appeal route after indications it was prepared to work with Canada and Mexico on the issue.
COOL came into effect in 2008, reducing imports and lowering prices for Canadian and Mexico cattle and hogs. The two countries challenged the U.S. before a WTO dispute settlement panel, which ruled last November it violated international rules on technical barriers to trade.
The USTR didn’t spell out the basis for its appeal. Written submissions from all parties must be made to the WTO by mid-April. An oral hearing is expected to take place in late April or early May and a final decision would be made before the end of June.
The U.S. says COOL provides consumers information on the origin of their meat, while opponents say it’s protectionism meant to discourage imports.
Agriculture Minister Gerry Ritz said he was disappointed by the move, but Canada would oppose the American action at the WTO.
“Our government has always stood with our cattle and hog producers against the U.S.’s unfair country-of-origin labelling,” he said. “The WTO panel decision recognized the integrated nature of the North American supply chain and marked a clear win for our industry. We are confident that the decision will be upheld so trade can move more freely, benefiting producers and processors on both sides of the border.”
Ritz had been upbeat about prospects for a peaceful settlement of the issue during recent meetings in Washington because American meat packers and producer groups had opposed COOL.
Martin Unrau, president of the Canadian Cattlemen’s Association, said the U.S. was prolonging its discrimination against imported livestock.
COOL continues to have a significant impact on Canadian cattle prices, he added. “There is at least a $25- to $35-per-head reduction in price on every head of cattle sold regardless of whether they are exported to the U.S. or not.”
The WTO Dispute Settlement Panel found the U.S. was in breach of its WTO obligations because COOL changed the conditions of competition in the U.S. livestock marketplace to the detriment of imported livestock. By requiring that all meat, including beef, sold at retail in the U.S. must inform consumers of the birth country of the animal, cattle segregation practices became necessary for U.S. feedlots and packing operations that handle imported livestock. These segregation practices and associated costs have created a disincentive for U.S. operations to purchase Canadian cattle. Those Americans who continue to purchase Canadian cattle do so at a discounted value relative to U.S.-born cattle.
Unrau noted that agriculture economist Daniel Sumner has estimated that nearly 9,000 U.S. meat-packing jobs are at risk of being eliminated if COOL is not resolved and the segregation costs remain.
“We had hoped that the U.S. government would recognize that this law is a drain on the competitiveness of its own meat and livestock sectors,” he continued. “We don’t need to repeal all of COOL. We just want a surgical amendment to the legislation that would eliminate the segregation. That should be a win-win for both Canada and the U.S.”
The CCA will continue to support the federal government’s legal team to ensure the strongest possible defence during the appeal, Unrau noted.