Representatives from Manitoba Pork, Ontario Pork and the Canadian Pork Council (CPC) attended the World Trade Organization (WTO) arbitration hearing on the U.S. country of origin labelling (COOL) law in Geneva in September. A delegation from the Canadian government presented evidence to the WTO panel of the damage caused to the Canadian livestock industry by the mandatory U.S. law, and asked for authorization to impose retaliatory tariffs. The Arbitrator’s report is expected by the end of November.
The CPC says Canada’s compelling arguments before the WTO panel that could authorize Canada to impose retaliatory tariffs of over 3 billion dollars of U.S. exports to Canada annually if the United States does not very soon change its country-of-origin labelling (COOL) law for meat to come into compliance with their international trade obligations.
“The CPC compliments the Canadian government delegation on its presentation which relied on facts, rather than hypotheses and assumptions which attempted to trivialize enormous harm COOL has imposed on Canada’s livestock industry”, says CPC chair Rick Bergmann.
The Canadian side presented evidence showing Canadian fed hogs exports to the United States fell by more than 80 per cent following the implementation in 2008 of mandatory country-of-origin rules which caused most U.S. processors to cease purchasing Canadian-born livestock. Severe reductions have occurred similarly for feeder pigs and Canadian cattle.
Bergmann points out that costs of compliance with COOL requirements are so onerous for U.S. food distribution system, the number of U.S. plants willing to purchase Canadian born pigs fell from over 25 prior to mandatory COOL to just a handful today.
“It has been almost six years since Canada filed its request to the WTO to adjudicate this dispute”, says added Bergmann, who farms in Steinbach, Manitoba. “The World Trade Organization has ruled four times that the U.S.’s COOL rules are discriminatory. The United States needs to deal now with fixing the faulty legislation before allowing steep tariffs to be imposed on a wide swath of its exports to Canada.”
Andrew Dickson, general manager of Manitoba Pork is hoping hearing these Geneva hearings will lead to the resolution of the dispute.
Dickson, who was in Geneva, says the labelling law has dramatically harmed the beef and pork industries in Canada and Mexico.
“Canada is claiming that COOL has had an impact on the beef and pork industries in Canada of about $3.1 billion per annum,” he said. “Part of that is the result of the price suppression effects of not being able to export as freely as we used to into the U.S. market and the loss of U.S. export markets because of push back from processors and retailers in the United States from accepting animals that have been born and raised in Canada. Mexico is seeking similar authority to impose tariffs.”

Mexico claims they should be able to put tariffs in place of $713,000,000 U.S.
Of course the United States is pushing back and saying that Canada and Mexico have grossly exaggerated their claims and they’ve used a different economic model to do their assessment and they’ve come up with figures that Canada experienced only $43,000,000 worth of hurt per year and that Mexico has maybe hurt to the point of $47,000,000 U.S. per year adds Dickson.
“The issue now in front of the panel is what number will the panel allow the two countries to impose,” he said. “I expect the panel to rule sometime in November.”
Steve Meyer, V-P pork analysis with EMI Analytics says the U.S. market remains hopeful the U.S. will address and resolve the issue of M-COOL to avoid retaliatory tariffs on U.S. exports.
In July, in an effort to ward of the threat of over $3,000,000,000 in retaliatory tariffs being imposed on U.S. products exported into Canada and Mexico, the U.S. House of Representatives voted to repeal provisions of M-COOL as they pertain to beef, pork and poultry.
Just prior to the August recess, two proposed amendments were introduced in the U.S. Senate, one which would follow the lead of the House and one that would replace mandatory labelling with a voluntary program that would require labels to detail where animals were born, raised and slaughtered to be considered domestic meat.
Meyer says so far the market remains hopeful.
“I think the market is pricing in kind of normal kinds of business going forward until it sees that. I guess we do have one more arbitration thing pending here, which I fully expect the United States to lose,” he said. “I talked to some guys recently and our classification was that the market was still hopeful and so am I. I’m still hopeful that we’ll get something rectified here.
I don’t think we’re going to win this arbitration but I’m hopeful that our Senate will act and follow the lead of our House in repealing the meat and poultry provisions of M-COOL.”  •
— By Harry Siemens