The Canadian government has welcomed the World Trade Organization's (WTO) ruling that the US's Country-of-Origin Labelling (COOL) measure discriminates against Canadian livestock.

Following nearly two years of consultation with the WTO, the Canadian government has announced that it is pleased with the decision. COOL is a mandatory US labelling measure that the government claims has forced its livestock industry to implement a burdensome labelling and tracking system. It contends that since COOL was implemented in 2008, there has been a negative impact on the Canadian livestock industry.

Between 2008 and 2009, exports to the US of Canadian feeder cattle declined 49% and exports of slaughter hogs dropped by 58%. The government argues that COOL led to the disintegration of the North American supply chain, created unpredictability in the market and imposed additional costs on producers on both sides of the border.

Within three months of the measure being implemented, Canada requested WTO consultations with the US. Consultations did not resolve the issue and, in October 2009, a WTO panel was summoned. Throughout 2010, legal submissions were made to the panel and two oral hearings took place in Geneva. A final report was made public in November last year, determining that COOL discriminates against foreign livestock and does not fulfil its stated objective. It was thus deemed inconsistent with the US's WTO trade obligations.

The US appealed against several findings in the panel's report in March, but the WTO has now upheld its original decision. However, the appeal decision found that there was not enough evidence to determine whether the COOL measure is more trade restrictive than necessary.

Reacting to the decision, Canada's Agriculture Minister Gerry Ritz said: “We are pleased with today’s World Trade Organization appeal decision in favour of our livestock industry. Our government has always stood with our cattle and hog producers, in order to create a stronger and more profitable integrated North American livestock industry.”

International Trade Parliamentary Secretary Gerald Keddy added: “We will continue to engage with our US partners to ensure trade can move more freely and benefit producers and processors on both sides of the border. That is why we are asking the United States to respect its international trade obligations and comply with the outcome of the World Trade Organization findings.”

However, as is often the case with WTO rulings, the US also claimed a partial victory, with US Trade Representative Ron Kirk stating that decision "affirms American consumers' rights to information" about the groceries they buy.

“The Appellate Body’s ruling confirms that families can still receive information on the origin of their meat and other food products when they shop for groceries," Kirk said. "The Obama Administration remains committed to ensuring that information on the origin of all food products covered by COOL is available to American families so they can make informed purchasing decisions."

“We are also pleased that the Appellate Body overturned the initial finding that COOL is more trade restrictive than necessary to provide consumers with valuable information on the food they buy,” Kirk added. “In doing so, the Appellate Body agreed with the United States and declined to accept any of the alternatives that Canada and Mexico claimed we should have used instead.”

July 3, 2012

Source: Tax News

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