The Canadian Cattlemen’s Association says it’s seen enough to know that the federal government should move now to revive its trade challenge against the United States’ country-of-origin labelling (COOL) legislation.
Canada had announced in mid-January that it would put its December 2008 complaint against COOL to the World Trade Organization “in abeyance,” pending the application of the U.S. government’s final COOL rule, as put forward in the final weeks of then-President George W. Bush’s administration.
Federal Agriculture Minister Gerry Ritz previously said Canada is prepared to take its complaint back to the WTO if the Obama administration were to decide to scrap the final rule in the form that was put forward by the Bush administration.
While President Barack Obama’s new agriculture secretary, Tom Vilsack, is not immediately revising the final rule as published in January, he has “communicated to the U.S. industry that he expects adoption of his suggested voluntary guidelines,” the CCA said.
Critics say Vilsack’s proposals make for a much stricter interpretation of COOL than Canadian livestock producers had hoped.
COOL requires labeling at U.S. retail for muscle cuts, ground beef, veal, pork, lamb, goat and chicken; wild and farm-raised fish and shellfish; fresh and frozen fruits and vegetables; peanuts, pecans, macadamia nuts, and ginseng sold by designated retailers.
January’s final rule, following an interim rule that took effect last September, outlines requirements for labeling covered commodities and the recordkeeping requirements for retailers and suppliers.
Before the final rule was announced, a number of U.S. meat packers and processors curtailed their imports of Canadian livestock and meat, citing the expense of dedicating separate production lines to handle imported animals or products.
“Will be worse”
And now, if Vilsack’s “suggestions” are adopted, “these substantive changes will further disrupt cattle and beef trade between Canada and the U.S.,” the CCA said in a release Tuesday.
“Vilsack added that if these substantive changes don’t take place, then he will amend the rule to enforce the changes,” the CCA noted.
“In our view, the guidelines, as written, will be worse than the interim final rule that the government of Canada was challenging through the WTO,” CCA president Brad Wildeman said in Tuesday’s release.
“The threat of forcing ‘voluntary’ compliance is tantamount to creating a de facto rule that’s very damaging to Canada’s red meat industries, as the U.S. industry will likely ease their compliance burden by avoiding purchase of imported animals and beef,” said Wildeman, who also runs Pound-Maker AgVentures at Lanigan, Sask.
“This latest action by the USDA exacerbates the already clear U.S. violation of the North American Free Trade Agreement (NAFTA) and WTO trade rules. When the final rule was adopted by the Bush administration in January, we felt a pause in Canada’s trade challenge was in order to evaluate the market response.”
Now, however, “it’s obvious that the U.S. has no intention of creating a workable solution for the industry,” he said, adding that Vilsack’s version of COOL “will ultimately impair the global competitiveness of the majority of our U.S. counterparts, who wanted to avoid the significantly increased costs of handling cattle imported from foreign markets.
“The government of Canada hasn’t been afraid to ignite trade action to defend Canadian producers in the past,” said Wildeman.
“We have no doubt the federal government will continue to deliver strong action to oppose any unfair implementation of COOL,” he added, urging an early resumption of the WTO challenge.
“Day by day”
But the Reuters news agency on Wednesday quoted Ritz as saying he’s been in close contact with Vilsack and the U.S. meat industry and hasn’t yet seen evidence of harm to Canadian exporters.
“In my discussions with industry, they’re going to hold the line and work with what we had negotiated with the Bush administration,” Ritz was quoted as saying. “We’ll keep analyzing it day by day. If they start to get tough, if it starts to affect our exports in a negative way, then we’ll go back harder.”
Reuters also quoted Ritz as saying Canada’s WTO challenge is still an option: “We’ll move forward with it as soon as we see some negative responses out of their application of the (COOL) rules.”