U.S. set to continue COOL fight at WTO

A third ruling backing Canada’s complaint 
will likely be appealed

US Agriculture Secretary Tom Vilsack

Despite three straight rejections of its controversial country-of-origin labelling (COOL) program on imported beef and pork by the World Trade Organization, various reports suggest the United States isn’t prepared to concede defeat on the issue.

It’s expected to appeal a Compliance Panel ruling that solidly endorsed two earlier WTO panel decisions that COOL violates international trade obligations by discriminating against imported products. It also said the current version of the mandatory program is actually worse than the original one.

American media have cited unnamed government officials as saying the U.S. is considering an appeal. “We are disappointed that the compliance panels have found COOL continues to discriminate against Canadian and Mexican livestock,” a spokesman for the U.S. Trade Representative said in various reports.

The U.S. appeal would go to the full WTO membership, which likely wouldn’t rule until next year. If it supports the earlier decisions, Canada and Mexico would have a green light to begin imposing retaliatory tariffs.

Canadian cattle and hog producers are looking to the Harper government to live up to its promise to impose $1 billion a year in retaliatory tariffs on American imports.

“Until COOL comes into compliance with the WTO, the Canadian Cattlemen’s Association will continue to insist that the government prepare to impose prohibitively high tariffs on key U.S. exports to Canada, including beef,” said CCA president Dave Solverson. The decision “leaves no shadow of a doubt that COOL is causing discrimination against live imports of cattle and hogs into the U.S. marketplace.”

Jurgen Preugschas, a former chairman of the Canadian Pork Council, said the WTO ruling came out “convincingly against the U.S.” The latest decision goes further than the two previous WTO rebukes of COOL by ruling that the American program breaches a basic principle of the international trade rules which guarantee equivalent competitive opportunities cannot be negated by an individual country.

Agriculture Minister Gerry Ritz said the decision has made it clear that COOL “is a blatant breach of the U.S.’s international obligations as a member of the WTO.”

He repeated calls for the U.S. to repeal the program, which Canada has been fighting since 2008 because it has cost farmers and processors $1 billion a year in lost sales and lower prices because of mandatory American rules on labels on meat packages identifying where the animal was born, raised and slaughtered remain.

One hundred and twelve members of Congress have written to U.S. Agriculture Secretary Tom Vilsack urging him to rescind the law. U.S. meat industry and farm groups, backed by Canadian counterparts, have been unsuccessful in getting American courts to rule against COOL laws.

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 first 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.

Preugschas said the latest decision reads as “if the panel, after seeing how the U.S. ignored the previous findings, wanted to anticipate and cut off further attempts to game the system in the guise of corrective measures, which arguably were actually designed to exacerbate problems caused by segregation requirements in COOL and intensify damage to Canadian farmers and ranchers.”

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