Today, in a move fully supported by the Canadian Cattlemen’s Association (CCA), the Government of Canada released a list of U.S. commodities that could be targeted for retaliation in relation to the ongoing Country of Origin Labeling (COOL) dispute.
The wide-ranging list of potential items targeted for retaliation will soon be published in the Canada Gazette, marking the formal launch of the next phase of the World Trade Organization (WTO) dispute settlement process over the recent U.S. amendment to the COOL regulations. Implemented on May 23, the U.S. amendment actually increases the discrimination against imported cattle and thereby leaves the U.S. in a position of non-compliance with its WTO obligations.
CCA Vice President Dave Solverson lauded International Trade Minister Ed Fast, Agriculture and Agri-Food Minister Gerry Ritz and the Government of Canada for their continued tough stance on COOL. Solverson accompanied Minister Ritz as he made the announcement in Vancouver today.
“It is unfortunate that Canada has to take this step, but somebody has to ensure that the U.S., as a WTO member, lives up to its trade obligations,” Solverson said. “This has been a difficult and a costly fight for Canada’s cattle producers. COOL discrimination has cost our cattle producers around $640 million in losses per year since being implemented in late 2008. Those costs are set to rise under the new amendment to an estimated $90 to $100 per head compared with the $25 to $40 per head hit we currently take, and that is simply unacceptable,” he said.
Ministers Fast and Ritz have previously indicated that Canada could seek retaliation in the range of $1.1 billion.
The WTO ruled last summer that COOL violates the U.S.’s WTO obligations because the requirement for meat produced in the U.S. from imported livestock to bear a different label from meat produced from U.S.-born livestock causes segregation, with additional handling costs inflicted disproportionately on imported livestock. The WTO gave the U.S. until May 23 to bring the COOL regulations into compliance.
As a result of U.S. non-compliance with the WTO, the CCA had urged the Government of Canada to immediately initiate a WTO compliance panel and request authority to impose retaliatory tariffs on U.S. exports to Canada. Rather than wait the estimated 9 to 12 month process to receive the necessary authority to implement those retaliatory tariffs, the CCA requested that the Government of Canada publish immediately a list of retaliatory options for public comment.
“The CCA will continue to work closely with the Government of Canada and our allies in the U.S. to achieve a resolution that genuinely eliminates the discrimination caused by COOL,” Solverson said. “Until then, our focus will remain fixed on pursuing retaliatory or compensation options through the WTO.”
The CCA's position remains that the only outcome that would bring the U.S. into compliance with the WTO is to amend the COOL legislation to allow either a single mandatory label for all meat produced in the U.S. or to allow for voluntary labelling. The CCA has to date spent in excess of $2 million in legal and advocacy expenses to fight COOL.