Canada-US Meat Exports Dispute: WTO Gives Relief To Canada Saying COOL Rule Is Discriminatory

Canada has won a half victory in its trade battle with the United States over meat-labelling laws. The World Trade Organisation in a ruling on last Monday said the U.S. country-of-origin labelling (COOL) rules are discriminatory and are hurting exports from both Canada and Mexico.

The COOL rules of 2008, were updated last year. As a result, the Canadian meat industry lost half of its meat exports market share in the U.S, reported Yahoo News.

COOL Requirements

Under COOL rules, all packaged meat must identify the place where the animal was born, raised and slaughtered. For supporters of COOL, it is useful as it gives better information to the U.S. consumers. But critics argue that segregating animals and tracking them pads up the costs and violates the spirit of free-trade agreements.

Canada's Trade Minister Ed Fast said COOL undermines North American supply chains and inflated the costs of Canadian pork and beef industries by $1 billion a year. In its observations, the WTO compliance panel said COOL broke trade rules by treating Canadian and Mexican livestock less favourably than the U.S. livestock. It further noted that the changes to the U.S rules, last year, aggravated the concerns of livestock exporters.

It said the amended COOL has increased the original COOL's detrimental impact on the competitive opportunities of imported livestock in the U.S. market.This is because it warrants a greater segregation of meat and livestock in the U.S. market. Also it adds to the burden of more record-keeping and indirectly appeals the domestic consumer to choose the domestic livestock.

Welcoming the WTO ruling, the Canadian federal government called up the United States to comply with the WTO decision. Agriculture Minister Gerry Ritz reacted that the WTO compliance panel's report was a proof of Canada's long-standing view that the revised U.S. COOL is blatantly protectionist and is flouting the WTO's original ruling against it. Ritz also noted that this is the third time that the WTO is ruling against COOL.

US May Appeal

It is expected that the U.S. will go on appeal within the mandated 30 days. If that appeal is also turned down, Canada can invoke WTO authorisation for retaliatory tariffs on U.S. exports to Canada. There is already a list a list of U.S. goods that Canada can target, reports Calgary Herald. Agriculture minister Ritz said, "We will target everything from California wine to Minnesota mattresses and will not rest until this is settled."