WASHINGTON, Aug. 26, 2015 - Canadian opposition to U.S. country-of-origin labeling (COOL) efforts has been strong and consistent, even against a voluntary labeling proposal introduced in July. Many lawmakers say the opposition to a U.S. voluntary program is “disingenuous,” since Canada has a voluntary regime of its own, but Canadian officials don’t see it that way.
Last month, Senate Agriculture Committee members John Hoeven, R-N.D., and Debbie Stabenow, D-Mich., who serves as the committee’s ranking member, introduced the Voluntary Country-Of-Origin Labeling and Trade Enhancement Act of 2015 (S. 1844), a bill they heralded as a potential solution to the COOL debate currently before the World Trade Organization. The WTO has ruled four times that the mandatory U.S. COOL rule requiring information on meat labels detailing where an animal was born, raised, and slaughtered was not consistent with trade obligations.
While Hoeven and Stabenow touted their bill as a WTO-compliant way to solve the dispute, it failed to receive a vote before the August recess, meaning the Senate has to act on either S. 1844 or a clean repeal bill passed by the House and offered in the Senate by Agriculture Committee Chairman Pat Roberts, R-Kan. At a press conference announcing the introduction of S. 1844, Iowa Republican Chuck Grassley, a cosponsor of the bill, said it would be “disingenuous” for Canada to oppose the legislation since Canada has a voluntary program of its own. Canadian Agriculture Minister Gerry Ritz respectfully disagreed.
“Senators Hoeven and Stabenow’s proposal in no way reflects Canada’s voluntary labeling regime – any suggestion of this is blatantly false,” Ritz said in a statement. “Should the United States move forward with their shortsighted proposal, Canada will have no choice but to impose billions of dollars of retaliatory tariffs on United States exports.”
Canada opposes a proposed voluntary regime for the same reason it opposes the mandatory provisions of the current U.S. law: segregation. The proposed U.S. voluntary program would still require segregation of live animals in order for producers to claim that meat from those animals is a “product of the U.S.”
In the U.S., an animal must be born, raised, and slaughtered in the U.S. to be considered a product of that country. In Canada, the animal must spend “a period of at least 60 days in Canada prior to slaughter” in a Canadian facility to be considered a “product of Canada,” leaving the possibility of U.S.-born livestock being accepted as domestic product in Canada.
Despite the opportunity to promote meat as a “product of Canada,” Dennis Laycroft, executive vice president for the Canadian Cattlemen’s Association, said the program –- which he equated more to truth in advertising guidelines than a marketing regime -– isn’t used very much.
“Mostly in our industry, we aren’t using that particular designation for our product,” Laycroft said in an interview with Agri-Pulse. Instead, he said consumers rely on brands they trust such as Certified Angus and Sterling Silver or licensing agreements through organizations that equate to something similar to checkoff boards in the U.S. “In our view, that works far better than any regulated or government-established guideline.”
Like the U.S., Canada also has mandatory COOL on a wide variety of products ranging from wine and brandy to fruits and vegetables. However, neither the U.S. nor Canada has ever disputed the requirements under each country’s respective COOL regime; the dispute currently before the WTO involves only muscle cuts of beef and pork. Canada also governs its voluntary COOL program by rule, not by law, which Laycroft said allows for greater flexibility and ability for change in the program.
On September 15-16, the WTO will hear arbitration arguments to decide if retaliatory tariffs by Canada and Mexico will be authorized and if so, how much. Canadian and Mexican officials contend that combined damages brought about by the mandatory U.S. COOL program could be as high as about $3.1 billion a year. A legal brief from the Office of the U.S. Trade Representative says Canadian and Mexican figures are far too high, suggesting a combined figure of almost $91 million is more appropriate. USTR says Canada and Mexico are using a “flawed economic methodology that severely overestimates the level of nullification or impairments attributable to (COOL).”
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