WTO to Hear Canada’s Challenge to U.S. Mandatory Country-of-Origin Labelling

(No. 350 - November 19, 2009 - 11:15 a.m. EST) The Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, and the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board, today announced that the World Trade Organization has established a dispute settlement panel to hear Canada’s challenge to U.S. mandatory country-of-origin labelling (COOL).

“Our assessments are showing us that COOL is having a negative impact on Canadian farmers and livestock producers,” said Minister Day. “We continue to stand up for the rights of Canadian producers during the dispute settlement process and make the case that the U.S. should lift these onerous requirements.” 

“The request for a WTO panel is our next step in our continued efforts to defend Canada’s top quality exports and hard-working producers,” said Minister Ritz. “This government puts farmers first and will continue to fight for fair and unfettered access for our Canadian producers and exporters. We are confident that we will win our challenge.” 

COOL is a mandatory U.S. labelling measure that imposes unfair and unnecessary costs on integrated North American supply chains, reducing competitiveness in both Canada and the U.S. and creating confusion and uncertainty for livestock industries on both sides of the border. 

The WTO dispute settlement panel will be asked to determine whether the COOL measures are consistent with the United States’ WTO trade obligations. The panel is expected to issue its report next summer or early fall.

The U.S. and Canada are each other’s largest agricultural trading partners. In 2008, bilateral agricultural trade totalled approximately $37 billion. Reducing obstacles to trade has contributed to mutually beneficial supply chains, making both countries more competitive domestically and internationally.

Canada and the U.S. continue to have a close and ongoing dialogue on COOL and other issues.

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A backgrounder follows.

For further information, media representatives may contact:

Mélisa Leclerc
Director of Communications
Office of the Minister of International Trade
and Minister for the Asia-Pacific Gateway
613-992-6186

Trade Media Relations Office
Foreign Affairs and International Trade Canada
613-996-2000

Meagan Murdoch
Press Secretary
Office of the Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board
613-773-1059

Media Relations
Agriculture and Agri-Food Canada
613-773-7972
1-866-345-7972

Backgrounder - WTO Panel on U.S. Country-of-Origin Labelling

What is U.S. country-of-origin labelling (COOL)?

As part of the U.S. Food, Conservation and Energy Act of June 2008, the United States passed legislation imposing mandatory country-of-origin labelling for beef, pork, lamb, chicken and goat meat, and certain perishable commodities sold at retail outlets in the U.S. This legislation was implemented on September 30, 2008, on the basis of an interim final rule. This was then replaced by a final rule that entered into force on March 16, 2009. COOL provisions for fish and shellfish have been in place since 2005.  

In order for meat to be labelled as a product of the U.S., all production activities (birth, rearing and slaughtering) have to occur in the U.S. For meat derived from animals of different national origins, the label must indicate the country or countries involved.

How does COOL discriminate against Canadian producers?

For covered commodities, including beef and pork, U.S. COOL requires the country of each stage of production to be tracked and recorded. In the context of the integrated North American beef and pork supply chains, U.S. COOL has resulted in additional and unnecessary costs being imposed on Canadian cattle and hog exports. U.S. processors, for instance, have to segregate Canadian animals and the meat from these animals at their facilities, which generates additional costs. Because of these additional costs, some processors no longer buy Canadian animals, buy them only on certain days, or buy them at a discounted price. 

Why a WTO dispute panel?

Regrettably, the WTO consultations held with the U.S. in December 2008 and June 2009 did not resolve the issue. Consequently, Canada presented its first request for the establishment of a dispute settlement panel on October 23, 2009, at a meeting of the WTO Dispute Settlement Body. As expected, the U.S. blocked the request. Canada’s second request, presented at the Dispute Settlement Body meeting on November 19, 2009, was accepted. According to WTO rules, a member can only block the creation of a panel once.  

The WTO panel will be asked to determine whether the COOL measures are consistent with the international trade obligations of the U.S. under the WTO. It normally takes up to nine months from the establishment of a panel for its final report to be released to WTO members.

For further information about the WTO dispute settlement process, please consult Understanding the WTO: Settling Disputes.