Trade Compliance

GHY discusses changes to international trade regulations and explores cutting-edge compliance strategies.

Ritz Makes COOL Pitch to Congress

Posted February 05, 2015

Agriculture Minister Gerry Ritz is in Washington this week leading a delegation to make Canada’s case against the U.S. Department of Agriculture’s mandatory country of origin labeling (COOL) rule directly to the U.S. Congress. Representatives from the Canadian Cattlemen’s Association, the Canadian Pork Council and the Canadian Meat Council are accompanying Ritz to relay Canada’s message to key industry coalitions and members of the newly elected U.S. House and Senate.

“Canada continues to call upon the U.S. to comply with the WTO ruling and eliminate COOL’s discriminatory treatment against Canadian hogs and cattle,” said Ritz in a press release. “Our government will always stand with our farmers and ranchers, and we will not shy away from taking whatever steps may be necessary, including retaliation, to achieve a fair resolution.”

The U.S. Trade Representative is currently appealing a Nov. 28 ruling by the World Trade Organization that COOL created an unfair trade environment for Canadian and Mexican livestock industries. The WTO is expected to hear the U.S. appeal later this month.

Both Canada and Mexico have signaled their willingness to impose retaliatory tariffs aimed at a wide range of U.S. exports to redress COOL’s harmful financial impact on the two country’s producers. “We will target everything from California wine to Minnesota mattresses, not to mention the over $2 billion in U.S. beef and pork sales to Canada,” Ritz said last October.

A new study released last week however challenges Canada’s claims of economic damages resulting from the COOL regulations. “COOL has not had a significant negative effect on the price paid for imported slaughter cattle relative to comparable domestic cattle,” says Auburn University Professor C. Robert Taylor in his report, adding that “COOL has not had a statistically significant negative effect on imports of feeder cattle relative to U.S. feeder cattle placements, and COOL has not had a negative impact on imported cattle for immediate slaughter.”

The report contends that declines in Canadian and Mexican livestock exports to the U.S. were largely the result of the economic recession which reduced consumer demand for higher-priced cuts of meat. Previous studies conducted on behalf of Canadian interests claimed COOL resulted in the loss of $1.4 billion in U.S. sales, but Taylor’s investigation “uses more robust data sources to assess the impact of COOL on market access” including Mandatory Price Reporting data supplied by U.S. beef packers to the Agricultural Marketing Service of the USDA, information which the Canadian studies did not consider.