Canada turns the heat up on COOL

Ottawa – Canada’s federal government says it’s prepared to impose tariffs on products from the U.S. if the American government doesn’t change its meat-labelling policy.

The U.S. Department of Agriculture (USDA) issued its final rule on Country of Origin Labeling (COOL) on May 23.

The USDA’s rule requires meat produced in the U.S. from imported livestock to have a different label from meat produced from U.S.-born livestock.

The new labelling requirement means including information about where each of the production steps – such as where an animal was born, raised and slaughtered – took place. It also removes the allowance for commingling of muscle cuts. (For more, read: “USDA’s final rule on COOL discriminates against Canadian hogs and cattle.“)

Industry stakeholders in Canada say the requirement amounts to discrimination. It also goes against last summer’s World Trade Organization’s (WTO) ruling on the issue, which ruled in Canada and Mexico’s favour. (For more, read: “WTO sides with Canada – again.“)

On Friday June 7, Canada released a list of agriculture and other products that will be subject to retaliatory tariffs if the U.S. doesn’t modify its requirements.

The list of foods includes cheese, fruits, rice, preserves, maple sugar and maple syrup, chocolate, pasta, cereals, breads and pastries, potatoes, orange juice, sauces and condiments, wine of fresh grapes, and certain sugars.

For the complete list, click here.

U.S. “protectionist policy”

In a statement, Ed Fast, minister of International Trade and minister for the Asia-Pacific Gateway, and Gerry Ritz, minister of Agriculture and Agri-Food and minister for the Canadian Wheat Board, said:

“Our government is extremely disappointed that the U.S. continues to uphold this protectionist policy, which the WTO has ruled to be unfair, and we call on the U.S. to abide by the WTO ruling.

“We are preparing to launch the next phase of the WTO dispute settlement process on the new U.S. rule, which we had hoped to avoid by the U.S. living up to its trade obligations.”

Both Fast and Ritz say they can formally launch the consultation process once the list of U.S. commodities is published in the Canada Gazette.

CCA fully supportive

The Canadian Cattlemen’s Association (CCA) says it fully supports the move.

“It is unfortunate that Canada has to take this step, but somebody has to ensure that the U.S., as a WTO member, lives up to its trade obligations,” says Dave Solverson, CCA vice-president.

“This has been a difficult and a costly fight for Canada’s cattle producers. COOL discrimination has cost our cattle producers around $640 million in losses per year since being implemented in late 2008. Those costs are set to rise under the new amendment to an estimated $90 to $100 per head compared with the $25 to $40 per head hit we currently take, and that is simply unacceptable.”

The CCA’s position remains that the only outcome that would bring the U.S. into compliance with the WTO is to amend the COOL legislation to allow either a single mandatory label for all meat produced in the U.S. or to allow for voluntary labelling. The CCA has to date spent in excess of $2 million in legal and advocacy expenses to fight COOL.