CANADA'S Agriculture Minister Gerry Ritz conducted a trade mission in the U.S. last week and talked extensively with Agriculture Secretary Tom Vilsack about U.S. actions regarding the country-of-origin labeling (COOL) rule.
The two remain at odds over whether the law meets the "spirit of free trade"; if Canada does not think so, it can impose up to $1 billion in trade sanctions.
Vilsack, speaking with agricultural journalists ahead of the meeting with Ritz, noted that a World Trade Organization panel said labels are allowed to be affixed to products so consumers can be informed, but WTO didn't like the way the proposed COOL rule was to be carried out.
Vilsack said the U.S. Department of Agriculture's proposed rule is "consistent with the spirit and legal requirements" of the WTO panel's ruling in the COOL dispute and believes the rule answers any questions about the origin of a product.
Instead of just using a "Product of the USA" label, the proposed rule, the comment period for which closed April 8, would require that the label actually go into further detail to explain where the product was born, raised and slaughtered.
Ritz emphasized that the proposed changes will not bring the U.S. into compliance with its WTO obligations and will further increase discrimination against exports of cattle and hogs from Canada, thus increasing damage to the Canadian industry.
"COOL continues to have a negative economic impact on the Canadian livestock industry, and we are standing with Canadian cattle and hog producers against unfair mandatory country-of-origin Labeling in the U.S.," Ritz said. "Our government will consider all options, including extensive retaliatory measures, should the U.S. not achieve compliance by May 23, 2013, as mandated by the WTO."
In meetings with key decision-makers on the Senate Agriculture Committee and congressional representatives, Ritz conveyed Canada's position to help its cattle and hog producers stand up against mandatory COOL.
Ritz also met with the American Meat Institute and livestock industry stakeholders who expressed their support for Canada's position and are advocating for changes to the mandatory COOL rule.
Canadian Cattlemen's Assn. representatives worked alongside Ritz in Washington, D.C., to advocate for the legislative amendments required for the U.S. to come into compliance. Cattlemen's president Martin Unrau said, "USDA's proposal has put the U.S. on a path toward Canada implementing retaliatory tariffs on U.S. exports."
Canada's beef and pork sectors have identified $1 billion per year in losses since COOL became mandatory. Ritz said the government is looking for a comparative amount in retaliatory action that can expand from multiple sectors to meet that annual shortfall.
In their April 5 "Daily Livestock Report," authors Steve Meyer and Len Steiner said the issue is no longer about whether COOL is a good or bad thing but more about whether one thinks exports to Mexico and Canada are important enough to warrant finding a solution that meets WTO rules. U.S. livestock industries are built for exports and cannot stand long against any impediments.
"While any retaliatory tariffs may be a year or more in coming, the fact that the U.S. has a program that violates WTO rules provides license for other countries to do the same thing. The U.S. cannot behave one way and expect others to behave another," they said.
Ritz and Vilsack also discussed opportunities for collaboration and the integrated nature of the Canada/U.S. agriculture and food supply chain that supports jobs and growth on both sides of the border. They instructed their officials to work on ways to further enhance collaboration in a number of thematic areas, including third-country adoption of science-based standards, new technologies and agricultural innovation.
Over the past three years, two-way agricultural trade between the U.S. and Canada has been worth approximately $38 billion annually.