Canada, Mexico and U.S. argue dollar value of COOL loss

Wednesday, September 16, 2015

by SUSAN MANN

Canada wants to slap more than C $3.1 billion of tariffs annually on American products in retaliation for the damage caused to the Canadian livestock industry by the United States’ Country of Origin Labelling law.

But it will up to a World Trade Organization arbitration panel, meeting this week in Geneva, Switzerland, to decide on the amount. Canadian government officials presented Canada’s figures to the panel earlier this week. Officials from Mexico and the United States also presented their figures.

Mexico has requested authorization for more than US $713 million in retaliatory tariffs, according to a Canadian Cattlemen’s Association article in the Sept. 14 issue of its bi-weekly newsletter, Action News.

The United States has estimated the costs related to Country of Origin Labelling (COOL) at US $91 million (C $1.2 billion) — substantially less than Canada’s estimate.

The Cattlemen’s article says the American figure “disregards any valuation related to segregation of cattle, transportation issues or price suppression in the Canadian market.”

Cattlemen’s representatives couldn’t be reached for comment. Both Cattlemen’s representatives and pork industry leaders are in Geneva this week attending the WTO hearing.

Gary Stordy, public relations manager for the Canadian Pork Council, says Canada’s figure includes the damage caused to both the pork and beef industries.

Jeff English, communications director for federal Agriculture Minister Gerry Ritz, says the government worked with industry to “put together our assessment of the economic harm of the United States’ proposed fix to COOL, which we feel makes it worse.” English was referring to the May 2013 changes the United States implemented to its law after losing a WTO decision in 2012 on the controversial legislation.

An American agricultural economics professor has reviewed Canada’s retaliation figure, English says. “The minister has said publicly he feels confident in Canada’s case.”

English says Mexico’s retaliation figure is lower than Canada’s because that country doesn’t export much pork to the United States. “Their figure is almost solely beef and that explains why their number is lower than ours.”

COOL, first implemented in the United States in 2008, calls for the identification of where livestock was born, raised and slaughtered on labels of products for retail sales. A successful challenge of the law by Canada and Mexico at the WTO resulted in the United States making changes in 2013. The Canadian government and livestock industry have said those revisions caused even more discrimination against Canadian livestock.

Canada and Mexico have won all four trade challenges of COOL. The most recent decision, handed down in May by the WTO Appellate Body, confirmed the unfair, discriminatory nature of the law and noted COOL violates the United States’ international trade obligations.

The Cattlemen’s newsletter predicts the WTO will release a decision on tariff amounts later this fall. “That decision will be final and not subject to appeal, enabling Canada and Mexico to proceed to implement the tariffs,” the newsletter states.

English estimates the decision will be issued late fall, likely in November.

Resolving the COOL dispute with the United States is the Cattlemen’s highest priority, the newsletter says, and the organization is looking for the next government after the Oct. 19 federal election to install the tariffs immediately.

Stordy says pork producers are also looking for the next government to put the tariffs in place as soon as the WTO authorizes them. BF