The World Trade Organization continues to prove its worth to Canada, even for trade problems that are encountered inside the NAFTA zone. On Friday, a WTO panel essentially agreed with Canada and Mexico that some meat-labelling requirements of the United States were so onerous that they amounted to protectionist measures.
In 2009, Tom Vilsack, the Secretary of Agriculture in the Obama administration, and a former governor of Iowa, added his weight to policies that came into force in 2008 – country-of-origin labelling requirements, familiarly known as COOL – by writing a letter encouraging meat processors to “include information about what production steps occurred in each country when multiple countries appear on each label.”
Many animals cross the U.S.-Canadian border more frequently than a lot of human Canadians and Americans, before they meet their end. But, as Lawrence Herman, a trade lawyer at Cassels Brock LLP, says, “What’s the true origin of a pound of beef from a calf born in Alberta, sent to graze in Montana, then coming back to Canada and finally back to a feedlot in Wyoming before being slaughtered and processed in the U.S.? Is the ground beef Canadian, where the calf was born, or American, where it was processed?”
American processors are the ones who have directly felt the burden of the COOL rules, rather than the Canadian and Mexican exporters of beef and pork. The upshot, however, is that the processors decided it was becoming too expensive to separate the Canadian and Mexican pigs and cows from their American equivalents, in order to label them accordingly. Meat imports into the U.S. have fallen as a result – Canadian cattle by 23 per cent and Canadian hogs by 36 per cent.
The panel concluded that the COOL regulation did not serve the purpose of informing consumers. Its real intention was to favour American beef and pork producers.
Sometimes, the WTO may seem like a stagnant entity, because the Doha Round to extend and deepen it has all but ground to a halt. But the meat-labelling decision last week is a vivid reminder of its vigour and effectiveness.