In this file:
Ruling Could Impact Pork Exports
Ruling Could Benefit Weanling Producers
Canada Hopes for Negotiated Resolution of
welcomes WTO ruling on COOL law
Reacting to the WTO ruling
reaction mixed on COOL ruling
COOL Ruling Could
Impact Pork Exports
Steve R. Meyer, Ph.D., Paragon Economics, Inc.
National Hog Farmer - Nov 21, 2011
The World Trade Organization (WTO) made official on Friday
its finding that the United
States' country-of-origin labeling (COOL) law
violates WTO rules. The WTO panel commented on two separate issues: The actual
U.S. statutory provisions and a
letter issued by Secretary of Agriculture Vilsack
that suggested voluntary labeling procedures that were more restrictive than the
actual USDA rules.
The panel found that the COOL program is a technical
regulation that is "inconsistent with the United States'
WTO obligations," since it accords less favorable treatment to imported Canadian
cattle and hogs than to like domestic products. Further, the panel found that
COOL does not fulfill its legitimate objective of providing consumers with
information on origin. Both factors constitute violations of WTO rules.
The Vilsack letter's
suggestions for voluntary action, according to the panel, go beyond certain
obligations under the COOL program and, thus, are an unreasonable administration
As noted, the ruling dealt with Canada's challenge to the COOL law
and resulting regulations. Canada was later joined by a number of other
countries that export products covered under COOL, including important pork
Mexico, Korea, China, Australia and Taiwan.
States will almost certainly appeal the decision, but most
observers believe the result will not change, thus paving the way for
Canada, Mexico and, possibly, other countries to place
punitive tariffs on U.S. goods. The United States
will have a year after the appeal ruling is received to make changes to the law
to avoid the retaliatory tariffs.
There is no guarantee that U.S. pork will be on the retaliation list, but it
is pretty logical that it will be, especially for Canada.
Mexico exports very little
pork to the United
States, but does export a lot of feeder cattle
and will have some discretion over what goods it places the tariffs on. Add to
that the fact that Mexico's
pork producer associations are virtually always looking for ways to block
imports from the United
States and it seems pretty likely we will be
hit there as well.
The tariffs could be avoided, but I think that would
require a repeal of the COOL law – or at least amendment of the COOL law. There
is some hope that an administrative fix (i.e., change the rules) can be
accomplished by USDA, although I'm not sure how we could change the rules enough
to satisfy WTO and still be within the law. There is little interest in Congress
to do anything at present, but that may change as the date for punitive action
September Exports Up 37% ...
COOL Ruling Could
Benefit Weanling Producers
Written by Kelvin Heppner - Portage Online
Tuesday, 22 November 2011
Southern Manitoba weanling
producers are among those who could benefit the most from the WTO's ruling on
The WTO has ruled the American policy, which came into
effect in the fall of 2008, discriminates against foreign
"This is another step forward in trying to repair some of
the damage done by COOL," says Karl Kynoch, Chair of
the Manitoba Pork Council.
"In Manitoba here, it devastated the weanling
industry. Packers refused to buy pigs that had originated out of
Canada, so that really reduced the
market for weanlings. Some of our weanling industry ended up closing their barns
because they had no market to go south," he says.
Kynoch says Manitoba-born
weanlings are still being sold at a $10 to $15 discount due to
"Right now we still have about 3 million going south, where
we used to have 4.5 million. So we had a huge reduction in the number going
south. Another difference is that the weanlings that go south are still being
discounted heavily," he says.
He notes Manitoba Pork is not looking for a complete
removal of the COOL legislation...
Canada Hopes for Negotiated Resolution of M-COOL
Gerry Ritz - Canada
Minister of Agriculture and Agri-Food
Farmscape for November 22,
2011 (Episode 4015)
Canada's Agriculture Minister is
hopeful last week's WTO ruling that U.S. Mandatory COOL discriminates against
foreign livestock will open the door to a negotiated settlement of the
Implemented in 2008, Mandatory U.S. Country of Origin Labelling requires American processors to label a range of
food products, including beef and pork, according to their country of
In a ruling released Friday the World Trade Organization
found the legislation provides imported livestock less favorable treatment than
like domestic livestock and is inconsistent with U.S. trade obligations.
Agriculture Minister Gerry Ritz recalls, when the labelling law was implemented, the impact on the Canadian
and American livestock industries was immediately negative.
Clip-Gerry Ritz-Canada Minister of Agriculture and Agri-Food:
To comply with the mandatory labelling program the U.S. livestock
industry must segregate Canadian animals, process Canadian livestock on a clean
separate line and package and label the meat separately.
These additional handling procedures of course mean
additional costs which are passed on to producers.
Some processors have simply refused to buy Canadian animals
while others are only willing to buy on certain days or at a deeply discounted
KAP welcomes WTO
ruling on COOL law
By Jordan Maxwell - The Daily Graphic (Canada)
Nov 22, 2011
Doug Chorney, president of the
Keystone Agricultural Producers, welcomed a WTO ruling on the U.S Country of
Origin Labelling law (COOL), a law passed in 2008
which unfairly scrutinized Canadian products.
"This is a welcome finding. We certainly are pleased for
the sake of our beef and hog producers. This is going to be very important but
we have to be cautiously optimistic because it still requires the appeal process
to be not invoked by the U.S. They have 50 days to choose to
appeal or not appeal," said Chorney.
The WTO's ruling found that Canadian products were treated
less favourably than U.S. products;
created unnecessary obstacles for international trade and did not fulfill a
In 2002, the U.S.
introduced a farm bill which created new mandatory labelling requirements for products such as beef, lamb,
pork, fish, shellfish, fruits and vegetables, and peanuts that would be sold in
U.S retail stores.
The Manitoba government, in conjunction with the
federal government, argued that these laws defied WTO agreements; however, the
law was made official in 2008 and harmed Canadian live-animal exports.
According to the Manitoba Pork Council, Chorney
said that "the price that farmers received in some cases when down to
"When you add freight to the purchase
price and farmers had no choice but to do shipping which is not
sustainable. Farmers and businesses fail because of that. There were
one-million market hogs being shipped to the U.S and but later declined by 50
per cent," he added.
What's more, Agriculture minister Stan Struthers said in a
release that in 2007, 4.5-million feeder pigs provided $191 million while
slaughter pigs relinquished close to $178 million.
But when COOL was implemented, Manitoba hog and cattle
exports sharply dropped and Struthers said that this continues to be the
In the first year, the exports of slaughter hogs declined
64 per cent compared to the previous year. Meanwhile, a 19 per cent drop in
exports was reported for feeder pigs.
"Manitoba hog producers were affected even more
than anybody else because they were so integrated with the U.S market. It was a
big impact," Chorney said.
KAP hopes the WTO's favourable
ruling will bring about the elimination of trade impediments between
Canada and the
US and the unnecessary costs
producers and exporters have been burdened with under COOL...
CME: Reacting to
the WTO ruling
via PorkNetwork - November 22, 2011
A dispute panel of the World Trade Organization (WTO)
officially ruled on Friday that the United States’ Country-of-Origing labeling program violates WTO agreements. The
announcement confirms what has long been expected by industry observers and
makes official what had been rumored since last summer. The WTO ruling dealt
with both the actual statutory provisions (ie. the
MCOOL law and regulations enforcing it) as well as a letter sent by Secretary
of Agriculture Tom Vilsack in which he asked
packers and processors to voluntarily apply more stringent conditions for
The panel ruled on the complaint filed by
Canada but the ruling applies to more
countries. Included among them are some major markets for U.S. pork and beef such as Mexico, Korea, China, Australia and Taiwan.
The WTO said in its ruling that the country-of-origin labelling (COOL — it did not include the “mandatory”
language that we have used in the past) program is “inconsistent with the United
States’ WTO obligations” since it give less favorable treatment to imported
Canadian cattle and hogs than to similar domestic products. In addition, the
panel said that the program does not the legitimate objective of providing
consumers with information regarding the origin of products. So not only is the
program illegal under WTO rules, according to the WTO it doesn’t even do what it
was intended to do.
In addition to the actual program, the WTO said the
Secretary Vilsack’s letter was an unreasonable
administration of COOL and thus constituted another violation of WTO regs.
Where do we go from here? The United States
has historically appealed virtually all unfavorable WTO rulings and we don’t see
any reason that practice will change with this case. That appeal process will
take, according to our sources, six to eight months ending with a final ruling
from WTO. If that ruling remains negative — and we believe that is likely — the
U.S. will have a year to rectify the
situation or face possible retaliatory tariffs. It is our understanding that
those tariffs could be imposed by any of the parties to the complaint, not just
The real question lies in what the Americans must do during
that one year period to avoid the tariffs. Can we change some regulations to
make the program WTO palatable or must the authorizing legislation be changed?
The former is obviously much easier but it seems unlikely that regulations can
be eased and still have anything that agrees with
the MCOOL legislation. If that means the legislation itself must be changed or
repealed, the challenge gets larger. How many laws do you recall being
repealed? Just how interested is Congress in messing with MCOOL given the
seismic issues on its plate at present?
There is no guarantee that retaliatory tariffs will fall on
U.S. beef and pork. Both producer
organizations and many, many producers of those products opposed MCOOL from the
beginning and were thus allies of producers from the complainant countries. But
some, most notably Mexico,
are always looking for a way to block imports from the U.S. and MCOOL has impacted imports of cattle and
hogs from Canada and cattle
from Mexico. Retaliating on similar
products makes a lot of sense whether we like it or not.
Through September, Canada and Mexico are the number one and two markets for
U.S. beef and the number
three and two markets for U.S. pork, respectively. Retaliatory
tariffs will not stop those shipments but will reduce them no doubt.
Congressional action last week has put even more doubt that the entire GIPSA
rule will be enacted — at least in FY 2012. Last Thursday both the House and
Senate approved the conference report on a spending bill that included FY12
agriculture appropriations. The President signed the bill Friday. This is the
culmination of budget work that began last summer. You might recall that in
June the House passed an agricultural appropriations budget that precluded
GIPSA from working on rules enforcing the livestock title of the 2008 Farm Bill
— the part that included the Congressional mandate for GIPSA to write rules on
five specific topics. That feature made it into the “conference report” — ie. the merger of the House and
Senate versions — that passed both houses last Thursday...
mixed on COOL ruling
By COLLEEN COSGROVE - The Chronicle Herald
November 22, 2011 - 4:38am
A trade victory for Canadian livestock producers spurred
mixed reaction among Nova
Scotia industry experts.
While the World Trade Organization’s ruling Friday against
country-of-origin labelling regulations — known as
COOL — was applauded, producers such as Sandie Troop
of Bruce Family Farm near Bridgetown and Chris De Waal of Getaway Farm in
Canning say the issue cements their decision to operate in a local, direct
Relying on the export market, they say, is risky and
"There is a growing demand for that connection between
rural and urban, so people know where their food is coming from and where it’s
being grown. The local movement has so much momentum and so much support," De
Waal told The Chronicle Herald on Monday.
"It doesn’t make sense for Nova Scotia producers to keep beating their
heads against the wall, relying on exports and jumping through hoops."
Implemented at the request of the U.S. in 2008, COOL required packers
to track the origin of the meat from production to retail. As a result,
administrative costs rose on both sides of the border and soon trade to
Canada’s largest foreign market
weakened. Paired up with the lingering effects of the bovine spongiform
encephalopathy crisis, H1N1 and weak pricing, cattle exports dropped 23 per cent
and hog exports dropped 36 per cent from 2007 to 2009.
The Canadian Pork Council said the regulations cost the
industry millions, while the cattle industry lost $400 million annually thanks
to COOL, the Canadian Cattlemen’s Association reports.
In Nova Scotia, the number
of hog operations plunged from its peak at 60 producers to just 10 in less than
two years, Pork Nova Scotia chairman Terry
Beck said in an interview Monday.
In anticipation of lower market prices, Beck, a hog
producer from the Kingston area, quit shipping
his breeding sows to the U.S. in 2009, just two years after
entering the market. The ruling, he said, should reopen market opportunities for
producers like himself who got out.
"(COOL) put a lot more little pigs on the market in
Canada because there wasn’t as many
moving across the border," Beck said. "The majority of (Nova Scotia producers)
ship outside of the province, so when we’re facing that much competition from
the Prairie producers, it got tough."
Although sympathetic to producers forced out of the
business by the regulation, Troop said the family business avoided any
COOL-related headaches by sticking to a local, niche market. She suggests it is
an approach all producers should consider...