U.S. proposed rule change to “exacerbate problems”

Washington, D.C. – The U.S. Department of Agriculture (USDA) has issued a proposed rule to modify certain areas of its Country of Origin Labeling (COOL) program.

The news has raised the ire of Canada’s beef and pork industry.

Under the USDA’s proposal, beef and pork packages imported into the U.S. from other countries would have to say where that animal was born, raised and slaughtered, says the BattlefordDailyNews.com. Other packaging restrictions would apply as well.

The changes 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”).

WTO’s ruling

In its ruling, the WTO sided with Canada and Mexico and said COOL severely discriminated against producers in those two countries. The WTO gave the U.S. a deadline of May 23 to comply with its ruling and make changes to the COOL program.

This recent change the USDA is proposing doesn’t comply with the WTO, says GrainNews.ca.

Specifically, the USDA’s proposed rule would modify the labelling provisions for muscle cut covered commodities to require the origin designations to include information about where each of the production steps (i.e., born, raised, slaughtered) occurred, reports BeefMagazine.com. It would also remove the allowance for commingling of muscle cuts.

Industry, government response

In response, Canada’s federal minister of Agriculture, Gerry Ritz, issued a statement saying, “Our government will consider all options, including retaliatory measures, should the U.S. not achieve compliance by May 23, 2013, as mandated by the WTO.”

The Canadian Cattlemen’s Association told GrainNews.ca that “the only way the U.S. government can comply with the WTO ruling is if they remove this legislation.”

The Canadian Pork Council released a report in January highlighting the financial damage COOL caused the industry. (“COOL caused billions of dollars’ worth of damage to pork industry: report”)

The report found that the direct impacts on hog producers calculated from official live trade data amount to more than US$1.9 billion as of October 2012, and were expected to exceed $2 billion by the end of 2012, at the current pace of accumulation of $500 million per year.

According to the Canadian government, says BattlefordDailyNews.com, all Canadian livestock producers have been hit hard by U.S. COOL requirements.

It says a year after the U.S. COOL regulations were imposed in 2008, shipments of Canadian cattle into the U.S. dropped by about 50 per cent, and exports of slaughter hogs fell by 58 per cent.

The Canadian Pork Council (CPC) and Canadian Cattlemen’s Association also reacted with disappointment to the U.S. government’s move.

“The proposed rule is supposed to remove discrimination found by the WTO after a lengthy expensive challenge by Canada,” says the CPC in a statement.

“It does not do this, indeed, it exacerbates the problems posed by COOL to Canadian exporters of pork and beef livestock.”

According to the CPC, beef and cattle exports to the U.S. have been cut by about $1 billion a year as a result of the existing American meat labelling regulations.