Ottawa is again going to the World Trade Organization to try to get the United States to change its country-of-origin labelling rules that Canadian cattle and hog producers say is costing them $1-billion a year.
The complaint is just the latest in a long line dating back to 2008 and, although the process is winding down, it could be another year before a final resolution is reached, officials say.
The latest effort by Canada relates to recent changes made by Washington to the application of its rules-of-origin labelling system, known as COOL, as a result of an unfavourable judgment by the WTO last fall.
But Trade Minister Ed Fast has said the changes, if anything, made matters worse and threatened to retaliate.
In June, the government issued a list of 38 commodity imports from the U.S. worth $7-billion that could be subject to punitive taxes once it got the go-ahead from the world rule-making body.
In a statement Monday, Fast said he was asking the WTO to establish a compliance panel to decide whether the recent changes made by the U.S. met their obligations.
“We believe that the recent amendments to the COOL measure will further hinder the ability of Canadian cattle and hog producers to freely compete in the U.S. market,” the minister is quoted as saying.
“We had hoped to avoid having to again resort to the WTO to resolve this matter. However, despite consistent rulings by the WTO, the U.S. government continues its unfair trade practices, which are severely damaging to Canadian industry and jobs.”
The minister was on route to an international trade meeting in Brunei and could not be reached for comment on Monday.
The U.S. government announced in May new regulations to the labelling system that would track cattle and hogs right from the farm to meat processing and distribution systems. Labels in grocery stores would include such information as “born, raised and slaughtered in the United States” for American meat. Cuts of meat from other countries could carry labels such as “born in Canada, raised and slaughtered in the United States.”
Canada has long objected to the labelling system on the grounds that it’s costly, burdensome and is leading to the “disintegration” of the North American supply chain.
Mexico, which also objects to the COOL regulations, is expected to follow the Canadian route and in seeking a compliance panel.
The process has frustrated exporters from both countries since 2008, when Washington first imposed its country-of-origin labelling system, but seeking redress at the WTO has been slow and arduous. Even if the WTO compliance panel sides with Canada and Mexico on the latest dispute, Washington could still appeal the decision.
Should the two countries win, past history suggests it could take a year or more before they receive a green light to retaliate.
The U.S. Department of Agriculture has defended its labelling rules as an aid to consumers, giving them the information to make decisions about the origin of the food they consume. Canadian and Mexican producers argue it is little more than a non-tariff barrier to favour domestic producers.
The labelling system cut Canadian cattle shipments to the U.S. by 50 per cent within a year and cut the export of slaughter hogs by 58 per cent.
The Canadian Pork Council recently estimated that since COOL was introduced, exports to the U.S. of Canadian hogs have fallen 41 per cent, and of cattle by 46 per cent. It put the total damages, including price declines, lost sales and added costs to the sector, at more than $1-billion a year.