May 7, 2009 (9:00 a.m. EDT)
No. 123

Canada Requests Further Round of WTO Consultations on U.S. Country-of-Origin Labelling

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, today announced that the Government of Canada is taking action on behalf of Canadian farmers in the dispute over U.S. country-of-origin labelling (COOL) measures. Canada has taken the next step in the World Trade Organization dispute settlement process by formally seeking further consultations with the United States.

“We are concerned with the approach the United States is taking to implement COOL and the negative impact it is having on our exporters,” said Minister Day. “Recent instructions from the U.S. Secretary of Agriculture encouraging the U.S. industry to use very strict labelling practices have removed the flexibility previously envisioned in the legislation and this affects the ability of our cattle and hog exporters to compete fairly in the U.S. market.”

“We are standing up for Canadian producers as we always have, and always will,” said Minister Ritz. “COOL is having a significant negative impact on the Canadian livestock industry and we are taking the necessary steps to ensure that our producers are treated fairly.”

Canada initially requested WTO consultations with the U.S. on COOL in December 2008, as it believed the measures were creating undue trade restrictions, to the detriment of Canadian exporters. At that time, U.S. provisions were being implemented on an interim basis.

A Final Rule to implement COOL was published in the U.S. Federal Register on January 15, 2009. However, on February 20, 2009, the U.S. Secretary of Agriculture issued an open letter to the U.S. industry, encouraging the use of stricter and broader labelling practices. According to Canadian industry representatives, those proposals will only add to the challenges they are already experiencing. They have observed that, since COOL came into effect, some U.S. processors are choosing not to buy Canadian animals, or are trying to buy them at a reduced price.

Mexico is in the process of filing a similar request at the WTO. This underscores both countries’ concerns over the impact of COOL on the integrated North American industry.

WTO consultations provide parties with an opportunity to resolve a dispute through discussions. If consultations fail to resolve the matter, the complaining party may request that the matter be referred to a WTO dispute settlement panel.

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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 Honourable Gerry Ritz
613-759-1059

Media Relations
Agriculture and Agri-Food Canada
613-759-7972
1-866-345-7972

Backgrounder

WTO Consultations on U.S. Country-of-Origin Labelling

What is U.S. Country-of-origin Labelling (COOL)?

As part of the June 2008 Food, Conservation and Energy Act, 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 United States. This legislation was implemented on September 30, 2008, on the basis of an Interim Final Rule, which was 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.

Retailers are required to provide information to the consumer as to the country of origin of the commodity and, in the case of fish and shellfish, whether it is farmed or wild.

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 where each animal was born, raised or slaughtered.

Why is the Government of Canada Concerned?

Canada is concerned that the requirement to label certain commodities (for example, beef and pork) based on the country of origin will impose additional costs at each stage of the process (for example, feedlots, processing and packing, and retail). Processors, for instance, may need to segregate animals at their facilities, which will generate additional costs. Because of these additional costs, processors may choose not to buy Canadian animals or may seek to buy them at a discounted price.

Why a Further Round of WTO Consultations?

A further round of consultations will provide the opportunity to clarify various aspects of the Final Rule and the U.S. Secretary of Agriculture’s review for compliance with the additional labelling practices. Canada hopes that this round of consultations will lead to a resolution of the COOL dispute.

If consultations do not resolve the dispute, Canada would be in a position to request the establishment of a WTO panel 60 days from the date of its request for consultations.

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