U.S. COOL violates trading rules: WTO

Geneva, Switzerland – The ruling is in and groups across Canada and other countries are welcoming the news.

The World Trade Organization (WTO) issued its final ruling on U.S. Country of Origin Labeling (COOL), saying it violates international trading rules, discriminates against foreign livestock and is inconsistent with the U.S.’s WTO trade obligations.

What COOL did

The U.S. COOL measure had forced livestock producers in Canada and other countries that trade with the U.S. to go through a lengthy labelling and tracking system that created unnecessary paperwork and additional red tape.

The Department of Foreign Affairs and International Trade Canada says the law led to the disintegration of the North American supply chain, creating unpredictability in the market and imposing additional costs on producers on both sides of the border. Thirteen WTO country members had joined as third parties in the dispute.

The U.S. will now be required to bring its measures into conformity with its WTO obligations. But an appeal could delay that outcome, says Foreign Affairs.

Losses

Saskatchewanhomepage.ca reports that when COOL came into effect it prompted a sharp drop in U.S. cattle (dropped by 49 per cent) and hogs (dropped by 58 per cent) imports from Canada.

The greatest losses occurred in Ontario and Manitoba. Weanling exports declined 30 per cent in volume and at least $5 to $10 per animal in value.

The Canadian cattle sector also lost hundreds of millions of dollars in lower prices, lost sales and the legal costs incurred during the WTO process.

U.S. packers are also pleased with the WTO ruling, reports Saskatchewanhomepage.ca, because segregating Canadian cattle and hogs is an added expense.

About COOL

In 2008, the U.S. COOL measure was implemented by the U.S. government on an interim basis and officially came into force in March 2009.

Canada requested consultations with the WTO first in 2008 and again in mid-2009. With the issue still unresolved, Canada requested a WTO panel and in November 2009 the panel was established. In May 2011, the WTO panel provided an interim report to all the parties involved on a confidential basis and did so again in July this year.