USDA’s final rule on COOL discriminates against Canadian hogs and cattle

Washington, DC – Canadian industry is reacting to the U.S. Department of Agriculture’s (USDA) final rule on its Country of Origin Labeling (COOL) program.

The USDA issued its final ruling on May 23.

Agri-Pulse.com reports that the USDA has ruled to modify the labelling provisions for muscle-cut covered commodities to require the origin designations to include information about where each of the production steps, such as where an animal was born, raised and slaughtered, occurred and removes the allowance for commingling of muscle cuts. (Read more at: U.S. proposed rule change to “exacerbate problems.”)

The changes, says industry stakeholders in Canada, amount to discrimination against Canadian and Mexican livestock imports. An issue the World Trade Organization (WTO) ruled on last summer (read more at: “WTO sides with Canada – again”).

The Canadian Cattlemen’s Association (CCA) issued a statement, saying it’s “dismayed” that the U.S. is not complying with the World Trade Organization’s (WTO) deadline to bring the U.S. COOL requirements into compliance with the U.S.’s international obligations and eliminate the discrimination against imported livestock.

The CCA adds that the WTO ruled last summer that COOL is in violation of WTO rules.

Cost of discrimination

The CCA explains that the requirement that meat produced in the U.S. from imported livestock bear a different label from meat produced from U.S.-born livestock causes segregation, with additional handling costs inflicted disproportionately on imported livestock.

This discrimination is costing Canadian cattle producers approximately $25 to $40 per head, totalling around $640 million per year. These losses have been incurred since COOL was implemented in late 2008 and continue to this day, says the CCA.

“It is extremely frustrating that the U.S. is continuing to inflict these costs on Canadian producers,” says Martin Unrau, CCA president.

The “USDA has demonstrated that it has no intention of attempting to end the discrimination and it is time it experiences some consequences.”

Unrau is referring to recent statements made by Gerry Ritz, Canada’s Agriculture minister, and Ed Fast, Canada’s International Trade minister, that Canada would impose retaliatory tariffs on U.S. exports to Canada if the U.S. does not comply with the WTO ruling.

Today is the deadline set by the WTO and the USDA’s regulatory change actually increases the discriminatory impact of COOL.

CCA says the USDA has indicated that the amendment will be effective immediately, but that enforcement will be delayed for six months to allow for industry education.

More reaction

In the U.S. some groups welcomed the news.

The National Farmers Union told Agri-Pulse.com that it was pleased the USDA “decided to stand strong and keep COOL.” It further added that it applauded the USDA’s decision to “take a proactive approach in bringing COOL into compliance by providing more information on the origins of our food, instead of simply watering down the process.”

WorldPoultry.net reports that a poll found that 90 per cent of adult Americans favour “requiring food sellers to indicate on the package label the country of origin of fresh meat they sell.”

Additionally, says WorldPoultry.net, 87 per cent of adults favoured, either strongly or somewhat, requiring food sellers to indicate on the package label the country or countries in which animals were born, raised and processed.  The poll also found that 90 per cent of adults favoured, either strongly or somewhat, requiring food sellers to indicate on the package label the country or countries in which animals were born and raised and the fact that the meat was processed in the U.S.

But not all groups were pleased. The National Cattlemen’s Beef Association (NCBA) says it’s “disappointed” with the final ruling. SoutheastAgNet.com reports that the NCBA and its president, Scott George, issued a statement calling the ruling “shortsighted.”

“Our largest trading partners have already said that these provisions will not bring the U.S. into compliance with our WTO obligations and will result in increased discrimination against imported products and in turn retaliatory tariffs or other authorized trade sanctions. As we said in comments submitted to the USDA, ‘any retaliation against U.S. beef would be devastating for our producers.’ While trying to make an untenable mandate fit with our international trade obligations, USDA chose to set up U.S. cattle producers for financial losses. Moreover, this rule will place a greater record-keeping burden on producers, feeders and processors through the born, raised and harvested label,” says George.

“As cattlemen and women, we do not oppose voluntary labelling as a marketing tool to distinguish product and add value. However, USDA is not the entity that we want marketing beef, and on its face, a label that says ‘harvested’ is unappealing to both consumers and cattle producers.”

Canada’s federal government

Reaction from Canada’s federal government was also strong. Ritz and Fast issued a statement, saying:

“Canada is extremely disappointed with the regulatory changes put forward by the U.S. [on May 23] with respect to COOL. These changes will not bring the U.S. into compliance with its WTO obligations. These changes will increase discrimination against Canadian cattle and hogs and increase damages to industry on both sides of the border.

“Canada will consider all options at its disposal, including, if necessary, the use of retaliatory measures.

“We will continue to stand with Canadian cattle and hog producers against these unfair measures and we will not stop until we succeed.”