The World Trade Organization (WTO) agreed last week to Canada’s request for creation of a Dispute Settlement Panel (DSP) to rule on the mandatory U.S. Country of Origin Labeling (COOL) law.
According to officials with the Canadian Cattlemen’s Association (CCA), the laws has so far cost Canadian cattle producers more than $250 million. The primary losses stem from lower cattle prices. Under the new law, some U.S. buyers quit buying Canadian cattle to avoid the extra costs that COOL compliance requires. Others who still buy Canadian cattle discount them in order to pay for the cost of compliance.
“We’ve been to Washington several times and sense no interest from U.S. lawmakers to resolve this issue, which is unfortunate since Canada is the U.S.’ best customer and top buyer of agricultural exports,” says Travis Toews, CCA vice president and foreign trade chairman. “Obtaining a panel ruling from the WTO may motivate U.S. lawmakers to resolve this problem.”
Canada announced its actions to continue with formal action a month ago, followed quickly by a similar announcement from Mexico. Canada’s request for the DSP came after two rounds of WTO consultations with the U.S. failed to resolve the issue.
According to a statement from the National Cattlemen’s Beef Association (NCBA) last month: “Canada’s decision to move forward with their complaint against U.S. COOL regulations is unfortunate, due to the potential retaliatory action that could be taken against U.S. beef. Since COOL was first proposed, we’ve continued to have concerns about its potential implications on our relationship with our top two trading partners – not to mention its impact on domestic feeder cattle markets at our borders to the North and South.
“The U.S. imports and adds value to Mexican and Canadian livestock through our feedlots, processing and infrastructure; and we export this value-added finished product back to Mexican and Canadian consumers. Any disruptions to either of these markets will have a significant economic impact on our industry. Unfortunately, it’s becoming clear that COOL has damaged these critically important trading relationships, and is not putting any additional money into the pockets of cattlemen.”
Canada and Mexico are the top-two U.S. trading partners, together accounting for 59% of total U.S. beef, beef variety meat and processed beef product export revenues last year.