The day after the U.S. implemented an amendment tothe Country of Origin Labeling (COOL) regulations that actually increases the discrimination against imported cattle, Canada was in front of the Dispute Settlement Body (DSB) of the World Trade Organization (WTO) stating its displeasure over said regulatory changes.
At the May 24 meeting in Geneva, Canada stated its position that the regulatory changes have not brought the U.S. into compliance with the WTO Agreement as purported by the U.S., and that “Canada is extremely disappointed with these regulatory changes.”
Canada also pointed out that the regulatory changes have the opposite effect of compliance because they increase the discrimination by the U.S. against Canadian livestock. They also increase the damaging effects of the COOL measure on both Canadian and U.S. industry.
“As a result, Canada is considering all of its options under the DSU [Dispute Settlement Understanding] to secure complete compliance by the United States with its WTO obligations,” according to the Canadian statement.
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The WTO ruled last summer that COOL is in violation because the requirement for meat produced in the U.S. from imported livestock to bear a different label from meat produced from U.S.-born livestock causes segregation, with additional handling costs inflicted disproportionately on imported livestock. The WTO gave the U.S. until May 23 to bring the COOL regulations into compliance.
The regulatory change proposed by USDA, however, is expected to necessitate additional segregation which will increase the impact of COOL to an estimated $90 to $100/head compared with the current $25 to $40/head. COOL discrimination costs Canadian cattle producers around $640 million/year, losses incurred since COOL was implemented in late 2008.
CCA is urging the government of Canada to proceed immediately to initiate a WTO compliance panel and request authority to impose retaliatory tariffs on U.S. exports to Canada. A panel could take 9-12 months to produce both a ruling and an appeal. However, rather than wait for the authority to implement those retaliatory tariffs, CCA is requesting the government of Canada publish immediately a list of retaliatory options for public comment.
In terms of next steps, Canada is preparing its arguments aimed at explaining to a compliance panel why the U.S. amendment does not comply with the WTO Agreement. This involves both legal arguments regarding how the U.S. rule contravenes the WTO text and providing evidence to demonstrate the economic impact of the discrimination. It is likely that the compliance panelists will be the same as those that served on the original panel and therefore are already familiar with the facts of the case.
CCA will continue to fight COOL until a resolution that genuinely eliminates the discrimination is achieved, the organization says, and reports that CCA has thus far spent more than $2 million in legal and advocacy expenses to fight COOL. CCA says its position remains that the only outcome that would bring the U.S. into compliance with the WTO 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 labeling. Until this outcome is achieved, CCA says it will continue to work with its allies in the U.S. and with the government of Canada to pursue retaliatory or compensation options through the WTO.
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