Government of Canada News Release
June 29, 2012

Canada Pleased with World Trade Appellate Decision on United States Country-of-Orgin Labelling

Appeal decision agrees with findings in favour of Canadian livestock industry, farm families and North American economies that COOL is discriminatory

Agriculture Minister Gerry Ritz, International Trade Parliamentary Secretary Gerald Keddy and Minister of State for Western Economic Diversification and Member of Parliament for Blackstrap Lynne Yelich today met with livestock producers and processors in Dundurn, Saskatchewan, to welcome a victory for Canada’s livestock industry. The World Trade Organization (WTO) Appellate Body confirmed today that the United States Country-of-Origin Labelling (COOL) measure discriminates against Canadian livestock and is inconsistent with the WTO trade obligations of the United States.

“We are pleased with today’s World Trade Organization appeal decision in favour of our livestock industry,” said Minister Ritz. “Our government has always stood with our cattle and hog producers, in order to create a stronger and more profitable integrated North American livestock industry.”

COOL is a mandatory United States labelling measure that forced the livestock industry in Canada and other countries 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 percent and exports of slaughter hogs declined 58 percent. COOL led to the disintegration of the North American supply chain, created unpredictability in the market and imposed additional costs on producers on both sides of the border.

“We are very pleased with today’s decision,” said Parliamentary Secretary Keddy. “We will continue to engage with our U.S. partners to ensure trade can move more freely and benefit producers and processors on both sides of the border. That is why we are asking the United States to respect its international trade obligations and comply with the outcome of the World Trade Organization findings.”

Canada and the United States enjoy the largest bilateral trading relationship in the world, with two-way trade in goods and services reaching almost $709 billion last year. Agriculture and agri-food bilateral merchandise trade accounted for $43 billion in 2011. Reducing obstacles to trade contributes to mutually beneficial supply chains, making both countries more competitive domestically and internationally. All told, the jobs of over 8 million Americans depend on trade with Canada, and over 2.4 million Canadian jobs depend on exports to the United States.

For the full findings and for more information on the World Trade Organization dispute settlement process, please visit WTO Appellate Body issues report on U.S. “country of origin” disputes and Dispute settlement.

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Background Information

On June 29, 2012, the World Trade Organization Appellate Body released its report on the United States Country-of-Origin-Labelling (COOL) measure. It confirms that the U.S. COOL measure discriminates against Canadian livestock. However, the appeal decision found that there was not enough evidence to determine whether the COOL measure is more trade restrictive than necessary.

Timeline

• On September 30, 2008, the COOL measure was implemented by the United States through an Interim Final Rule. The Final Rule came into force on March 16, 2009.
• On December 1, 2008, Canada initially requested World Trade Organization consultations with the United States.
• On December 16, 2008, consultations were held, with the participation of Mexico.
• On February 20, 2009, U.S. Secretary of Agriculture Tom Vilsack issued a letter to industry requesting that they comply with stricter guidelines than those found in the Final Rule.
• On June 5, 2009, Canada held a further round of consultations with the United States on COOL. The consultations did not resolve the issue.
• On October 7, 2009, Canada requested a World Trade Organization panel and, on November 19, 2009, the panel was established.
• Throughout 2010, legal submissions were made to the panel and two oral hearings took place in Geneva.
• On July 29, 2011, the World Trade Organization panel provided its final report to the parties to the dispute on a confidential basis.
• On November 18, 2011, the World Trade Organization panel released its final report determining that the United States COOL measure discriminates against foreign livestock, does not fulfill its stated objective and that the letter sent from Secretary Vilsack to industry was an unreasonable administration of the COOL measure. Thus, COOL is inconsistent with the United States’ World Trade Organization trade obligations.
• On March 23, 2012, the United States appealed several findings in the panel’s report.