COOL has resulted in a tightened, protectionist border.
Struggling American livestock producers — hit hard by the recent economic downturn and the drop in demand for meat in the United States — have spurred recent trade protectionism measures, including country of origin labelling regulations (COOL), that essentially require United States meat processors to segregate live Canadian cattle and hogs from US animals.
Any packages containing Canadian meat must be labelled as such, but this separate labelling has been costly for most U.S. processors who have consequently been unwilling to accept Canadian animals at all.
COOL has resulted in a tightened, protectionist border. Canadian hog exports to the U.S. for market pigs have dropped to 585,000 pigs from January through June. That compares to 1.4 million for the same period a year earlier — about a 60 per cent drop. At $100 per hog market value, this loss is around $81.5 million, or $163 million over a full year (not to mention a 30 per cent drop in feeder pig exports). Also, slaughter-cattle exports are down 20 per cent and feeder-cattle exports 50 per cent.
In May 2009, Canada requested a WTO consultation to object to the U.S. regulations. While the U.S. administration and Democrats in the House and Senate talk free trade, their actions have been the opposite and have restricted trade..
Keeping U.S. and international markets open for Canadian livestock is especially important for the financial survival of Canadian producers. They have been hit hard by high feed-grain prices driven up by U.S. ethanol policy, weak livestock prices, a strong Canadian dollar, “mad-cow disease”-related border closures for cattle, and H1N1-related border closures for pork to some countries.
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