Canada looks at tariffs over COOL

Steaks_blogDespite its name, the situation between the U.S. and Canada regarding country-of-origin labeling (COOL) is anything but cool.

Canada could impose almost $1 billion in tariffs on U.S. products if the U.S. doesn’t comply with a World Trade Organization (WTO) ruling on meat labeling by a May 23 deadline, Canadian Agriculture Minister Gerry Ritz said following the conclusion of a trade mission to the U.S.

COOL was implemented in 2009 and provides information to consumers about where the food they purchase comes from, including meat, vegetables, fruit, fish and shellfish.

Following a complaint filed by Canada and Mexico last summer, the WTO Appellate Body ruled the existing COOL law violated WTO rules on technical barriers to trade. The appellate body found COOL was not allowable because it led to “less favorable treatment” of meat from other countries and more favorable treatment of meat from the U.S.

However, despite upholding the ruling that COOL violates trade rules through favorable treatment, it also reversed a decision stating COOL does not fulfill the goal of giving information to customers regarding origin.

Ritz just wrapped up a trade mission to the U.S., where he met with U.S. Agriculture Secretary Tom Vilsack to discuss ways for the two nations to work together in addition to COOL. During the meeting, Ritz conveyed “Canada’s strong disappointment with the proposed country-of-origin labeling regulatory changes put forward by the U.S.,” according to a statement.

In March, the U.S. Department of Agriculture released proposed changes to COOL that would still allow for labeling, while bringing COOL into line with the WTO ruling, officials said.

The proposed rule would change the way “muscle cut covered commodities” are labeled to require origin designation to include information not only on where the meat came from (currently often listed as “Product of the U.S.”), but specifically where each step occurred such as where the animal was born, where it was raised and where it was slaughtered. Additionally, the rule also would not allow muscle cuts of different origins to be commingled, according to a USDA press release.

“Our government is focused on ensuring that Canadian producers will be able to gain and maintain broader access to diverse markets, to bolster the Canadian economy. 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 in a statement. “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.”

Proponents of COOL say the regulations provide needed information to consumers about where their food comes from. Opponents say the regulations are costly to producers, could adversely affect trade and may not satisfy the WTO ruling.

The U.S. and Canada do about $38 billion in agricultural trade annually.

Read the proposed rule here.

For more on COOL from Neogen’s blog, click here.

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