It’s official: Canada takes COOL back to WTO

The trade dispute Canada put on the back burner over the United States’ country-of-origin labelling (COOL) law on meat and other foods has officially returned to the front burner.

International Trade Minister Stockwell Day and Agriculture Minister Gerry Ritz confirmed Thursday that Ottawa has formally applied to the World Trade Organization for consultations with the U.S. through the WTO dispute settlement process.

Canada had initially requested WTO consultations with the U.S. on COOL last December, when it appeared the measures were creating undue trade restrictions that worked against Canadian exporters. COOL at that time was being implemented on an interim basis.

Washington’s COOL legislation imposes mandatory labelling for beef, pork, lamb, chicken and goat meat, and certain perishable commodities sold at retail outlets in the U.S. Imported fish and shellfish have been covered under COOL since 2005.

For meat to be labelled as a product of the U.S., all production activities (birth, rearing, slaughtering) have to occur in the U.S. For meat derived from animals of different national origins, COOL requires a label to indicate the country or countries where each animal was born, raised or slaughtered.

The Canadian government and livestock producer groups have expressed concern for years that COOL would impose added costs at each stage of the process, from U.S. feedlots right through to the U.S. grocer’s meat case.

The fear has been that U.S. processors, for instance, may choose not to buy Canadian animals or may look to buy them at deep discounts to offset the costs of segregating animals for labelling purposes.

Ottawa put its request on hold when the “final rule” to implement COOL was published in the U.S. Federal Register on Jan. 15 this year. The outgoing Bush administration had eased Canada’s concerns by granting importers added flexibility in labelling foreign-grown products.

“Recent instructions”

On Feb. 20, however, incoming President Barack Obama’s new agriculture secretary, Tom Vilsack, issued an open letter to the U.S. industry, encouraging the use of stricter and broader labelling practices. Otherwise, he wrote, he would consider reviewing the COOL legislation’s language to impose tighter restrictions.

“Recent instructions from (Vilsack) encouraging the U.S. industry to use very strict labelling practices have removed the flexibility previously envisioned in the legislation and this affects the ability of our cattle and hog exporters to compete fairly in the U.S. market,” Day said in a release Thursday.

“According to Canadian industry representatives, those proposals will only add to the challenges they are already experiencing,” the Canadian government said Thursday.

“They have observed that, since COOL came into effect, some U.S. processors are choosing not to buy Canadian animals, or are trying to buy them at a reduced price.”

Ritz and Day noted that Mexico is now in the process of filing a similar request at the WTO. “This underscores both countries’ concerns over the impact of COOL on the integrated North American industry,” the government said.

A further round of consultations with the U.S. will provide the opportunity to “clarify various aspects” of both the final COOL rule and Vilsack’s planned review for compliance with the additional labelling practices, the Canadian government said Thursday.

Canada “hopes that this round of consultations will lead to a resolution of the COOL dispute,” the government said, but if not, Ottawa “would be in a position to request the establishment of a WTO panel 60 days from the date of its request for consultations.”

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