OTTAWA, ONTARIO — (Marketwire) — 12/04/12 — The World Trade Organization (WTO) arbitrator decided today that the United States has until May 23, 2013, to bring its Country of Origin Labeling (COOL) measure into compliance with its WTO obligations. International Trade Minister Ed Fast and Agriculture Minister Gerry Ritz issued the following statement in response:
“Our Government has stood firm with our cattle and hog producers against the unfair country-of-origin labelling of the U.S. The WTO Appellate Body has recognized the integrated nature of the North American supply chain and marked a clear win for our livestock industry.”
“We expect that the U.S. will bring itself into compliance with its WTO obligations by May 2013 as determined by the arbitrator for the benefit of producers on both sides of the border. We are particularly pleased that the arbitrator determined a reasonable period of time close to that proposed by Canada and Mexico, as opposed to the much longer period suggested by the United States.”
“Canada and the United States enjoy the largest bilateral trading relationship in the world. Reducing obstacles to trade has contributed to mutually beneficial supply chains, making both countries more competitive domestically and internationally. Removing onerous labelling measures, and the unfair, unnecessary costs that go with them, will improve competitiveness, boost growth, and help strengthen the prosperity of Canadian and American producers alike.”
On June 29, 2012, the WTO Appellate Body confirmed the U.S. COOL measure discriminates against Canadian livestock and is inconsistent with the WTO trade obligations of the United States. The United States is expected to bring the COOL measure into compliance with its international trade obligations within the “reasonable period of time” of 10 months determined by the WTO arbitrator today. The U.S. requested that it be granted 18 months to achieve compliance from the date of adoption of the Appellate Body report on July 23, 2012, (i.e. until January 23, 2014), while Canada and Mexico aggressively argued in favour of six- and eight-month periods, respectively (i.e. January 23, 2013, and March 23, 2013). The arbitrator’s decision is not subject to appeal.
COOL is a mandatory United States labelling measure that forced the livestock industry in Canada to implement a burdensome labelling and tracking system. When the United States implemented COOL in 2008, the impact on the Canadian livestock industry was immediately negative. Between 2008 and 2009, exports to the United States of Canadian feeder cattle declined 49 per cent and exports of slaughter hogs declined 58 per cent. COOL led to the disintegration of the North American supply chain, created unpredictability in the market, and imposed additional costs on producers.