OFFICIALS with the Canadian Pork Council (CPC) and Canadian Cattlemen Assn. (CCA) said the U.S. government needs to make only small alterations in legislation enacting country-of-origin labeling (COOL) for beef and pork to comply with World Trade Organization decisions while still making it possible for consumers to be properly informed.
The Obama Administration said during WTO arbitration it has yet to decide whether complying with the WTO rulings requires changes in legislation or only in regulation. The arbitrator, Italian lawyer Giorgio Sacerdoti, ruled Dec. 4 that the U.S. has until May 23 to comply with the WTO panel and appellate body's decisions on COOL. The U.S. had requested 18 months.
Martin Rice with CPC told Feedstuffs that compliance needs to come through legislation, not just regulation.
"We are very much of the view that for the U.S. to come into compliance with the WTO ruling will require legislative action to eliminate the conditions that give rise to the discrimination against live animals born outside of the U.S. -- the discrimination arising from the requirement of COOL that there be different labels for animals processed in a U.S. plant (that are) born, raised and slaughtered in the U.S. from those not born raised and slaughtered in the U.S. Those labeling requirements are explicit in the legislation; thus, a legislative or statutory change will be needed," Rice said.
John Masswohl of CCA agreed, adding that the needed amendments are narrow enough to still meet consumer information needs.
"Compliance with the WTO COOL ruling requires legislative action; regulatory changes cannot remedy the discrimination found, but the fix is narrow and leaves COOL intact," Masswohl told Feedstuffs.
On the issue of consumer information, Rice said consumer demands could be met even after Congress amends the COOL legislation.
"Although COOL was not in response to consumer interests in the first place -- rather, it was in response to pressure from specific producer groups seeking conditions that would hinder imports -- with the statutory change, consumers will still know the country of origin of the meat," Rice said.
"COOL labels will still be mandatory. Any meat from a U.S. facility would continue to be identified as originating in the U.S., and meat from another country will be identified as originating in that country. The only change would be that meat from imported livestock that is processed in (a U.S. Department of Agriculture/Food Safety & Inspection Service)-inspected facility would be labeled the same as meat from U.S. livestock processed in that facility," he continued.
"The Appellate Body was clear that the discrimination caused by COOL stems from the fact that different labels are required for meat from cattle and hogs exclusively born, raised and slaughtered in the U.S. than for meat from cattle and hogs born or raised in another country. As these labeling requirements are statutory, it is a statutory, not regulatory, change that is needed to mitigate their discriminatory effect," Rice concluded.
Masswohl agreed with these arguments. CCA and CPC have worked closely with the Canadian government throughout the COOL battle.
He went on to note that the existing COOL measure has been very costly to the Mexican and Canadian cattle industries as well as Canada's pork industry.
Should the U.S. fail to meet the May 23 deadline, Canada and Mexico would be in a position to retaliate against U.S. imports up to the value of the harm caused to the Canadian and Mexican industries. (The level of retaliation approved by WTO is generally based on the amount of harm the illegal measure has caused.)
Citing research by Dr. Daniel Sumner, Masswohl noted, "The COOL measure puts more than 9,000 U.S. jobs at risk. The longer compliance is delayed, the longer these jobs are in jeopardy. Failure to adequately comply with the WTO ruling puts U.S. exports at risk through potential retaliation by Mexico and Canada."
"Sumner estimates that total Canadian cattle losses are $639 million per year. This figure does not include Canadian hog losses or Mexican cattle losses, so the impact is likely well over $1 billion per year," he added.
Jurgen Preugschas, who leads CPC's trade committee, told reporters, "We would prefer not to take retaliatory action. We would like the U.S. to come into compliance. We want trade to come back into the normal form that it was in our integrated market."
"We have many allies in the U.S. that agree with that as well," he added. "The packing houses, the distributors and many of the ... pork and beef associations agree that COOL was harmful to both sides of the border and the sooner that we get rid of it, the better it is."
Even so, Preugschas said if the U.S. fails to meet the May 23 compliance deadline, Canadian pork producers will be pressing the Canadian government for immediate retaliation against imports of U.S. agricultural products, which could be set at around $1 billion per year.