Interim WTO report said to put kibosh on costly COOL rules

Wednesday, May 25, 2011

by BETTER FARMING STAFF

A World Trade Organization panel assessing the fairness of U.S. country of origin labelling (COOL) rules has sent its interim draft report to the countries involved.

But it’s going to be a while yet before the World Trade Organization accepts and publishes the decision, says Martin Rice, the executive director of the Canadian Pork Council. And until that point, it’s difficult, if not impossible to confirm the accuracy of news reports indicating the panel has decided the rules violate the organization’s trade standards.

According to Feedstuffs, a U.S. livestock publication, the panel issued its preliminary ruling May 20. The report is supposed to remain confidential for 30 days, the publication says.

Rice says the federal government received the report within the past week and that “we are informed that it’s absolutely confidential.”

That’s because it’s not final and could be changed, he explains. “It’s still subject to the government saying ‘whoa, you completely misread that data we gave you’ or something like that.”

Nevertheless, “there’s no question the industry has been optimistic that our Canadian and Mexican arguments would gain some acceptance from the panel in terms of their legitimacy,” he says.

Patrick Girard, a spokesperson with Agriculture and Agri-Food Canada, confirmed the government received the confidential report. “Canada strongly argued our case and we will continue to do so through to the end of this process,” he states in an email.

The law was first introduced with the 2002 U.S. Farm Bill but was twice postponed because of the need for amendments. Finally implemented in 2008, it requires beef, pork and some other products sold in U.S. stores to identify the country where the animal was born. This means U.S. ranchers and meat packers must handle Canadian cattle and hogs separately from U.S. livestock.

In 2008, the Canadian Pork Council estimated COOL to cost the country’s hog farmers’ $500,000 a week and the Canadian Cattlemen’s Association estimated it cost beef farmers more than $1 million a day.

Mexico first filed the complaint in 2008 and Canada joined in 2009. Other countries that have third party status in the dispute are Argentina, Australia, China, Colombia, India, Japan, Korea, New Zealand, Peru, Brazil, the European Communities, Guatemala and Chinese Taipei.

Canada filed a complaint in 2008 alleging that the U.S. legislation violated the WTO agreement. Several countries subsequently signed on as third parties, including: Argentina; Australia; Brazil; China; Colombia; European Union; Guatemala; India; ; Korea, Republic of; Mexico; New Zealand; Peru; and Chinese Taipei.

That same year, Mexico filed a similar complaint and Canada joined as a third party in 2009. Other countries that have third party status in the dispute are Argentina, Australia, China, Colombia, India, Japan, Korea, New Zealand, Peru, Brazil, the European Communities, Guatemala and Chinese Taipei.

It’s expected the U.S. will appeal, Feedstuffs says and adds that U.S. industry associations are advising its packers and processors to continue to follow the law. The publication says it has heard that if the U.S. does not appeal, it will have to remove the controversial legislation or risk retaliation and possibly a trade war with Canada and Mexico.

The decision does not appear on the WTO’s dispute settlement website. The website indicates that the panel was expected to issue a reports for both complaints by mid-2011 and “the panel expects to conclude its work within that timeframe.”

In a statement issued Thursday, the Canadian Cattlemen’s Association said it “has read with interest the media reports about the World Trade Organization’s (WTO) preliminary ruling on Canada and Mexico’s complaint against Country of Origin Labeling (COOL).
The CCA looks forward to the final WTO report being issued later this year.

“The CCA has been involved in a number of WTO actions, including this case against the United States and the pending case against Korea’s import restrictions on beef, and is committed to working with the Government of Canada to strongly defend the rights of Canadian beef cattle producers.”

A National Cattlemen’s Beef Association news release issued Thursday says its president, Bill Donald, called the country of origin labelling legislation “a bad idea from the beginning.”

“This ruling is unfortunate for the U.S. government but the consequences of a poor decision have been revealed. We fully support WTO’s preliminary ruling,” the release quotes Donald. “It is also very important to note that this ruling is very much preliminary and all of the details are not yet known.” BF