WTO Dispute Panel Sides with Canada and Mexico Against Current US COOL RuleMon, 20 Oct 2014 19:42:11 CDT
The long anticipated ruling on the revised Country of Origin regulations put in place in May 2013 by the Obama Administration has been released by the World Trade Organization- and as critics of the COOL Rule were predicting- the trade body has sided with Canada and Mexico in saying that this move by the US government to fix the original COOL rule fails to address the discrimination against Mexican and Canadian Cattlemen.
Specifically, the WTO has said in their Monday morning ruling "In particular, the compliance panel concluded that the amended COOL measure increases the original COOL measure's detrimental impact on the competitive opportunities of imported livestock in the US market, because it necessitates increased segregation of meat and livestock according to origin; entails a higher recordkeeping burden; and increases the original COOL measure's incentive to choose domestic over imported livestock."
The WTO says in separate statements that both Mexico and Canada have been harmed economically by the US rule because " it accords imported Canadian livestock treatment less favourable than that accorded to like domestic livestock, in particular because the amended COOL measure increases the original COOL measure's detrimental impact on the competitive opportunities of imported Canadian livestock." (put Mexican in place of Canadian for the statement about harm to Mexico.)
Click here for the findings and conclusions from the WTO.
Canadian Government officials have signaled their pleasure in having their position affirmed by WTO- the Honourable Ed Fast, Minister of International Trade, and the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food, issued the following statement this morning:
“Today’s WTO compliance panel’s report re-affirms Canada’s long-standing view that the revised U.S. COOL measure is blatantly protectionist and fails to comply with the WTO’s original ruling against it. The WTO’s clear and consistent findings in support of Canada’s position effectively supply a clear message to the U.S.: End this protectionist policy that creates economic harm on both sides of our border, and comply with your international trade obligations.
“The U.S. COOL policy hurts businesses and workers in both the U.S. and Canada. The Harper government will continue to stand up for our farmers, ranchers and workers to bring this harm to an end.
“Canada is deeply disappointed that the U.S. has so far been unwilling to make the changes required to respect their trade obligations. In light of today’s ruling, Canada calls upon the U.S. to enact legislative change to eliminate COOL’s discriminatory treatment against Canadian hogs and cattle.
“Canada will be watching this situation closely to ensure U.S. compliance in accordance with the WTO’s clear ruling. We will continue to fully assert our rights to achieve a fair resolution to our concern, including seeking authorization to implement retaliatory measures on U.S. agricultural and non-agricultural products if and as necessary.”
Predictably, early reaction from within the cattle industry finds the industry split. Bob McCan of Victoria, Texas- the President of the National Cattlemen's Beef Association, says it's time to repeal COOL. Period.
“The announcement today by the WTO dispute panel on the U.S. Country of Origin Labeling rule brings us all one step closer to facing retaliatory tariffs from two of our largest trading partners. Our producers have already suffered discounts and faced the closure of a number of feedlots and packing plants due to the effects of this short-sighted regulation. COOL is a failed program that will soon cost not only the beef industry, but the entire U.S. economy, with no corresponding benefit to consumers or producers.
“NCBA has maintained that there is no regulatory fix to bring the COOL rule into compliance with our WTO obligations or that will satisfy our top trading partners. We look forward to working with Congress to find a permanent solution to this issue, avoiding retaliation against not only beef, but a host of U.S. products.”
The smaller, populous US Cattlemen's Association calls it a "disappointing decision from the World Trade Organization that COOL regulations are in some respects inconsistent with U.S. trade obligations."
“The WTO has never said we cannot require country-of-origin labeling,” said USCA President Danni Beer. “The WTO has only explained that COOL has to be implemented in a way that conveys sufficient origin information to the consumer. USCA strongly supported the revised COOL regulations issued in response to that original WTO decision, and we continue to believe those rules are WTO consistent.”
“While we will continue to review the WTO’s decision, we urge the U.S. Trade Representative to consider appealing the ruling if there are meritorious grounds to do so,” continued Beer. “In addition, we ask USDA to review the ruling to determine whether additional regulatory changes may permit the U.S. to come into compliance without weakening COOL.”
“USCA has tirelessly defended COOL from attack not only at the WTO, but also in our domestic courts and the halls of Congress,” continued Beer. “We will continue to do so in light of today’s decision, and we look forward to working with the Administration to address the decision in the most constructive way possible.”
While Mexico has not released a list of possible items they would retaliate against with tariffs- Canada has floated such a list- click here to see their likely targets for retaliation if the US does not fix COOL.
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