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WTO panel will hear Canada’s COOL challenge

The World Trade Organization has set up a dispute settlement panel to hear Canada’s challenge of U.S. mandatory country-of-origin labelling (COOL).

Canada’s first request last month for a WTO panel was, as expected, blocked by the U.S. government. But the WTO’s Dispute Settlement Body on Thursday accepted Canada’s second request and a WTO member such as the U.S. can only block the creation of a panel once.

“Our assessments are showing us that COOL is having a negative impact on Canadian farmers and livestock producers,” International Trade Minister Stockwell Day said in a release Thursday.

“We continue to stand up for the rights of Canadian producers during the dispute settlement process and make the case that the U.S. should lift these onerous requirements.”

Agriculture Minister Gerry Ritz added in the same release that the federal government is “confident that we will win our challenge.”

Both Canada and Mexico first brought complaints about COOL to the WTO in 2008, but had put those requests on hold when it appeared that COOL legislation, as brought forward near the end of the Bush administration, would not be as burdensome as feared on U.S. processors.

But Canada re-filed its request after the Obama administration announced it would hold U.S. processors to a less flexible interpretation of COOL on their products.

WTO consultations held with the U.S. in December 2008 and June 2009 “did not resolve the issue,” the federal government said.

The WTO dispute settlement panel will be asked to determine whether the COOL measures are consistent with the international trade obligations of the U.S. under the WTO.

It normally takes up to nine months from the establishment of a panel for its final report to be released to WTO members, thus the panel’s report would be released next summer or early fall.

“Confusion and uncertainty”

Passed by the U.S. government in June 2008, COOL legislation requires country-of-origin labelling for beef, pork, lamb, chicken and goat meat, and certain perishable commodities sold at retail outlets in the U.S.

The legislation was implemented in September 2008, on the basis of an interim final rule, which was replaced by a final rule that entered into force on March 16.

For meat to be labelled as a product of the U.S. under mandatory COOL, all production activities (birth, rearing and slaughtering) have to take place in the U.S. For meat derived from animals of different national origins, the label must indicate the country or countries involved.

“In the context of the integrated North American beef and pork supply chains, U.S. COOL has resulted in additional and unnecessary costs being imposed on Canadian cattle and hog exports,” the federal government said.

“U.S. processors, for instance, have to segregate Canadian animals and the meat from these animals at their facilities, which generates additional costs. Because of these additional costs, some processors no longer buy Canadian animals, buy them only on certain days, or buy them at a discounted price.”

As a result, the federal government said, COOL is “reducing competitiveness in both Canada and the U.S. and creating confusion and uncertainty for livestock industries on both sides of the border.”

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