COOL puts Canada at trade disadvantage

Posted on October 28, 2014 by 40 Mile Commentator

Lethbridge Herald- Canadians and Americans play nice most of the time.

We share a wide variety of cultural and geographical similarities, and in general, enjoy a very cordial relationship.

But every so often, something gets in the way. For those of us living north of the border, country-of-origin labelling (COOL) has been a major issue for Canadian cattle producers, an issue which has dramatically impacted the industry here.

COOL was implemented in 2008, and the rules which governed the U.S. initiative were updated last year. A program which has been called discriminative against imports from Canada and Mexico, has served to reduce Canadian meat exports to the U.S. by about half.

It resulted in a long-fought trade battle between Canada and its southern neighbour, a battle which has raged for years through the World Trade Organization (WTO). Monday, the WTO released a ruling which found U.S. the meat-labelling law does discriminate against Canadian and Mexican producers. A WTO compliance panel has said COOL breaks trade rules, and went on to say changes to the law last year made the policy even more detrimental to livestock exporters.

Of course, these rulings most times are about as valuable as the paper they are printed on. There is little doubt COOL was protectionist in nature, right from the very start, as American politicians bowed to the pressure of special-interest groups such as R-CALF. COOL resulted in excessive costs for Canadian producers, and headaches for packing plants in the United States, as the cost of importing cattle from Canada rose substantially.

It was sold to the American public as a way to better inform consumers, and give them the choice to buy American, as labels on all packaged meat are required to state where the animal was born, raised and slaughtered, under COOL.

Those who supported COOL also pointed to mad-cow disease (BSE) in Canada, which cropped up in the early 2000s, and used that as a rallying cry to ram through legislation, despite a lack of scientific evidence Canadian cattle would pose any danger at all to American consumers.

Estimates of a $1-billion price tag have been floated as to how much COOL has actually cost the Canadian beef and pork industries. Both industries have had their struggles as a result, as have some American packing plants near the border which once relied on animals coming in from Canada to meet their quotas.

The WTO has sent a strong message in its recent ruling, however, a ruling the U.S., like it has time and time before, will likely ignore. In order for COOL to be put to rest, the respective governments involved must act. American legislators in Washington D.C. must change course and do away with a policy which has damaged trade relations between the two countries.

Canada, for its part, can certainly retaliate with tariffs of its own on goods imported from the U.S. but the simple fact of the matter is, we need the U.S. more than they need us. The American market is critical to Canada in so many respects, not only for live-animal exports but for so many other industries.

Retaliatory efforts, therefore, can go only so far, and we should be wise to respect our own WTO obligations in the process. That said, we do have very little ammunition which which to attack the Americans on trade issues. Organizations like the WTO have been created to streamline that process. The hope is this time the U.S. will finally realize the harmful impact COOL has had on the North American industry in general, and reverse course on its own.