Canada’s government has published a list of US commodities that are potential targets for retaliation unless the dispute over country of origin labelling (COOL) is resolved.
The publication of the wide-ranging list, Canada Gazette, which is expected shortly, will mark the formal launch of a World Trade Organization (WTO) dispute settlment process over the US’ new rule on COOL, which Canada claimed had increased discrimination against imports, and had therefore left the US in a position of non-compliance with its international trade obligations.
Announcing the decision, Canada’s international trade minister Ed Fast and agriculture minister Gerry Ritz stated: “Our government is extremely disappointed that the US continues to uphold this protectionist policy, which the WTO has ruled to be unfair, and we call on the US to abide by the WTO ruling.
“We are preparing to launch the next phase of the WTO dispute settlement process on the new US rule, which we had hoped to avoid by the US living up to its trade obligations.”
The ministers said Canada would continue to pursue a fair resolution through the WTO over the next 18-24 months, and would not act on any retaliatory measures until authorised to do so by the WTO.
Damage to industry
The move has been welcomed by Canada’s farmers and meat processors, who argue that the updated US COOL laws will increase losses in Canada’s meat sector. Since the laws were introduced by the US in 2008, exports of Canadian hogs to the US have fallen by 41%, while cattle exports have fallen by 46%. It is estimated that the total cost to Canada’s livestock industry of the regulation exceeds $1bn per year.
Canadian Pork Council chair Jean-Guy Vincent said: “The new rule, if anything, increases the discrimination against imported animals and we believe that a legislative change is required to fix COOL.
“The release of the list of potential targets by the federal government is a clear indication of how determined Canada is to see COOL fixed.”
He added that analysis had shown that COOL was costing the Canadian hog sector $500m annually in lost imports.
The Canadian Cattlemen’s Association president Dave Solverson estimated that COOL was costing Canada’s cattle producers around $640m in losses per year.
“Those costs are set to rise under the new amendment to an estimated $90 to $100 per head compared with the $25 to $40 per head hit we currently take, and that is simply unacceptable,” he added.
Solverson said it was “unfortunate” that Canada had to launch retaliation against the US, but that “somebody has to ensure that the US, as a WTO member, lives up to its trade obligations”.
Canadian Meat Council president Arnold Drung said it was “critical” to the long-term interests of both Canadian and American meat producers and processors that international trade between the two countries continued “within the context of a rules-based international framework”.
“The imposition of bureaucratic, costly and unnecessary obstacles that make no contribution to food safety and are of little or no benefit to consumers jeopardises North American competitiveness in the global marketplace and weakens economic growth, investment and job opportunities on farms and in meat processing facilities across Canada and the US,” he explained.