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WTO Condemns U.S. Country of Origin Labeling – for Third Time

October 20, 2014 (Ottawa, ON) – The Canadian Pork Council (CPC) welcomes the decision of the World Trade Organization (WTO) compliance panel on US country of origin labeling as it applies to imported livestock.

CPC Past Chair Jurgen Preugschas in Saskatoon, Saskatchewan says, “The Compliance Panel charged with assessing the WTO conformity of the US response to the AB condemnation of the US COOL in 2012 has found convincingly against the US. Specifically, the May 23, 2013 revised Final COOL rule failed to bring the US into conformity with its WTO obligations”
The Compliance Panel’s condemnation went further than the previous decisions in that it:

  • In addition to breaching Article 2.1 of the WTO Agreement on Technical Barriers to Trade (TBT), the United States COOL Measure was in breach of Article III:4 – one of the most basic principles of the WTO Agreement.
  • Made conditional affirmative findings on Canada’s claims under Article XXIII:(b) of GATT 1994.

These new elements in the panel report are very important.

First, Canada’s national treatment rights under Article III:4 of the General Agreement on Tariffs and Trade 1994 (GATT) which guarantee equivalent competitive opportunities cannot be negated by the regulatory distinctions provisions of the TBT Agreement.

Second, the conditional findings on Article XXIII:(b) will support Canada’s position in the event the basic findings are overturned on appeal.

It is as if the panel after seeing how the US ignored the previous findings wanted to anticipate and cut off further attempts to game the system in the guise of “corrective” measures which arguably were actually designed to exacerbate problems caused by segregation requirements in COOL and intensify damage to Canadian farmers and ranchers.

In Ottawa, CPC Chair Jean-Guy Vincent said, “We are very pleased with this win, but it is the third time. It is time for the United States to respect its WTO obligations.”
Mr. Vincent explained, “After the WTO Appellate Body confirmed the illegal discrimination in COOL, in 2012, the US did nothing to eliminate the discrimination against imported Canadian born hogs and beef cattle. Indeed, the revised Final rule made the discrimination worse.”

Since its implementation in 2008, COOL has had a direct impact of at least $2.5 billion on Canadian hog exports to the US. This does not include price suppression effects on hogs sold in Canada.

Mr. Vincent noted the discrimination in COOL adversely affects the US hog market for all participants by contributing to reduced efficiency and even plant closures. Mr. Vincent explained, “US pork producers have lobbied actively to eliminate the discrimination and for the United States to come into compliance with its WTO obligations. CPC will be working with our American counterparts and other US stakeholders to help find a timely and effective legislated end to this irritant and its serious discrimination. The Compliance Panel’s decision makes crystal clear the need for change. There is no reason why it should not expedite favourable negotiations and a long overdue return to normalcy”.

Mr. Vincent was thankful for the help of the Government of Canada in this challenge. He noted, “This clear and compelling result could not have been achieved without the strong and unwavering support of International Trade Minister Ed Fast and Agriculture Minister Gerry Ritz and their officials. The dedication and excellence of Canada’s legal team and trade experts ensured that WTO dispute settlement worked as it should”.

While the panel decision could be referred to the WTO Appellate Body for review, CPC has urged Ministers to press Washington for immediate implementation. Mr. Vincent noted, “Justice delayed is Justice denied, and stalling and totally inadequate responses have already delayed enough. Further appeals which only delay the inevitable, negate the WTO requirement to conduct disputes in good faith.”

He concluded “The COOL legislation must be changed.  Only by doing this will the U.S. avoid forcing Canada to pursue its rights to retaliate against more than $2.5 billion worth of U.S. exports to Canada.”
The CPC serves as the national voice for hog producers in Canada. A federation of nine provincial pork industry associations, our organization’s purpose is to play a leadership role in achieving and maintaining a dynamic and prosperous Canadian pork sector.

Source: Canadian Pork Council


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