On May 18, in a historic and decisive victory for Canada’s cattle industry, the Appellate Body of the World Trade Organization (WTO) issued a fourth and final ruling confirming that U.S. mandatory country-of-origin labelling (COOL) discriminates against U.S. imports of Canadian cattle and hogs. The ruling effectively ends the eight-year legal battle initiated by the Canadian Cattlemen’s Association (CCA) in 2007 challenging the U.S. labelling law for violating the U.S.’s international trade obligations.
On May 19, the Government of Canada announced it will move immediately to request authority from the WTO to impose retaliatory tariffs on U.S. exports, as per the WTO process. In a show of support for the Government of Canada’s request to the WTO to authorize retaliation, I was pleased to stand alongside Agriculture and Agri-Food Canada Minister Gerry Ritz and International Trade Minister Ed Fast in Ottawa as Minister Ritz cited a retaliation figure of between $2.5 billion and $3 billion.
Nearly two years earlier, I stood next to Minister Ritz in Vancouver when he announced the Government of Canada’s list of commodities being targeted for potential retaliation in the amount of $1.1 billion. That figure was based on the annual impairment suffered to that point under the 2009 final COOL rule. The new, larger amount cited by Minister Ritz is due to the additional damage following the May 23, 2013 COOL amendment that actually increased the discrimination.
The U.S. will almost certainly request that an arbitration panel review Canada’s retaliation number. As soon as that arbitration is complete and the arbitrator’s report is issued — likely later this summer — Canada will be in a position to implement retaliatory tariffs on key U.S. exports. The CCA urges the U.S. Congress to repeal COOL on red meat and avoid billions of dollars in retaliation.
The WTO final ruling prompted a swift response from the U.S. House Agriculture Committee. On May 20, the House Agriculture Committee approved legislation that would repeal COOL by a bipartisan vote of 38 to 6. The CCA is hopeful that the full House will pass the legislation upon return from the Memorial Day (May 25) holiday. After House passage the legislation would be referred to the U.S. Senate, which has historically been the more difficult chamber for those seeking COOL reform.
The CCA will continue working with the Government of Canada through the arbitration process in Geneva and to encourage the U.S. to adopt a genuine resolution. If the U.S. attempts a further amendment that does not eliminate the segregation of imported livestock, the CCA will strongly urge the Government of Canada to proceed swiftly and exercise Canada’s right to retaliate.
I’d like to thank my fellow cattle producers across Canada for supporting this fight over the long haul. I know it hasn’t been easy and at times a few of you questioned the very significant costs and energy required by this file.
But I think you’ll agree that the cost to fight COOL — $3.25 million in legal costs since 2007 — is minor in comparison to the cost COOL has inflicted in the overall industry. With this historic and decisive victory supporting the Canadian beef industry’s right to fair market access, I am confident that it has been a battle worth fighting and we will finish it through to the end.
The CCA will continue its efforts in Washington, D.C., to advocate for a resolution that genuinely resolves the problem of COOL by eliminating the need for U.S. livestock buyers to segregate imported animals from U.S.-born animals.
Time is of the essence for Canada regarding the Trans-Pacific Partnership (TPP). The CCA’s view is that Canada must ensure that it is a founding member of a 12-country deal.
At present the U.S. Congress is moving towards granting President Obama Trade Promotion Authority, an authority he needs to sign an agreement. Many TPP countries view this step as necessary for the final pieces of the agreement to come together.
The recently implemented Australia-Japan FTA has now twice cut the Japanese tariff on Australian beef and is already paying dividends in the form of increased Australian beef exports to Japan. By contrast, Canadian beef remains subject to a 38.5 per cent tariff and it will be difficult to maintain position in the Japanese market.
The National Cattlemen’s Beef Association (NCBA) and Beef & Lamb New Zealand are pressing their respective governments to complete a TPP agreement so that lost ground in Japan can be regained. The CCA believes it is absolutely critical that Canada adopt the same sense of urgency as its beef trade competitors in shaping the conditions of access in Asia for the coming decades. There should be no excuse for Canada to miss this opportunity.
Also in May, I attended a trilateral meeting with NCBA and Confederación Nacional de Organizaciones Ganaderas in Mexico. There was great interaction between leadership at this meeting and it was an excellent opportunity to strengthen ties.
Not all industry issues are national in impact and the CCA understands the importance of assisting with significant regional issues. I attended the B.C. Cattlemen’s Association annual meeting in May and look forward to attending the Alberta Beef Producers semi-annual meeting in June. I’ve had the opportunity to speak with Alberta’s new Agriculture Minister Oneil Carlier and Deputy Minister Jason Krips and appreciate their reaching out so quickly following the minister’s appointment.