Canadian livestock groups join U.S. lawsuit

Calgary, Alta. – Eight organizations, both Canadian and American, have joined forces to sue the U.S. Department of Agriculture (USDA) over its stand on COOL, the Country of Origin Labeling program.

The USDA issued its final ruling on COOL on May 23 (See: “USDA’s final rule on COOL discriminates against Canadian hogs and cattle.”)

Its final ruling called 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.”)

Canadian industry stakeholders responded right after saying the move amounted to discrimination against Canadian and Mexican livestock imports. An issue the World Trade Organization (WTO) ruled on in 2012, siding with Canada and Mexico.

On July 8, the eight organizations – including the American Meat Institute, the American Association of Meat Processors, the Canadian Cattlemen’s Association (CCA), the Canadian Pork Council (CPC), the National Cattlemen’s Beef Association, the National Pork Producers Council, the North American Meat Association and the Southwest Meat Association – filed their legal challenge with the U.S. District Court of the District of Columbia.

The CCA says the complaint is being made on the grounds that the USDA’s amendment violates the U.S. Constitution and the U.S. Agriculture Marketing Act, “and is arbitrary and capricious.”

The CPC adds that the plaintiffs believe that a legislative change is required for the U.S. to come into compliance with its WTO obligations on COOL.

“The U.S. Congress missed an opportunity to implement a legislative change to COOL in the farm bill deliberations,” says Jean-Guy Vincent, CPC’s chair.

“CPC has partnered with its U.S. counterparts in this legal challenge to quickly resolve this dispute as legislative options for the U.S. to come into compliance with its WTO obligations become fewer.”

Martin Unrau, CCA’s president, adds that the legal action is warranted because the increase in discrimination against imported cattle inherent in the USDA’s May 23 amendments to the COOL rule will irreparably injure Canada’s livestock producers and their U.S. customers.

“Unfair trade discrimination”

“The CCA is forced to take this step with its allies as the USDA chooses to continue down a path of unfair trade discrimination that undermines the job security of American workers and harms the U.S. meat processing industry in addition to placing an unfair burden on Canadian cattle producers,” says Unrau.

The lawsuit follows a move last month by the Government of Canada to release a list of U.S. commodities that could be targeted for retaliation in relation to the COOL dispute.

The CCA says the Government of Canada has said it could seek retaliatory compensation of approximately $1.1 billion following the completion of ongoing WTO proceedings, which will move forward independently of this U.S. based litigation.

The CCA says its position remains that the only outcome that would bring the U.S. into compliance with the WTO ruling of June 2012, which found that COOL violates the U.S.’s WTO obligations, 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.

The CPC adds that COOL has had a severe impact on the overall Canadian livestock industry.

Since the implementation of mandatory COOL in 2008, there has been a decrease in exports to the U.S. of Canadian live swine of 41% and 46% for beef cattle. Total estimated damages due to price declines, lost sales and added costs to the Canadian livestock sector have exceeded $1 billion per year.

This legal challenge, says the CPC, represents a third channel by which the CPC is seeking a resolution to COOL and its discrimination against Canadian livestock exports.

The CPC says it will also continue to work closely with the Government of Canada to pursue a WTO compliance panel that could lead to retaliatory tariffs if the revised U.S. rule is not compliant with U.S. WTO obligations.

The CPC also adds that it will continue to look for the U.S. Congress to make a legislative change that would remove the discriminatory impact of COOL.