Friday, August 22, 2014

WTO rules on COOL

As Canadians expected, the World Trade Organization (WTO) panel has ruled that the U.S. Country of Origin Labeling regulations are illegal.

The Wall Street Journal reports that “sources familiar with the panel’s confidential report” say the panel made a clear-cut decision against the U.S.

Canada and Mexico filed a challenge against the regulations and were backed by Brazil, China, the European Union, India, Japan, Korea and New Zealand, Australia, Colombia and Guatemala.

“We all know what the report says. The U.S. lost,” one source told the Wall Street Journal.

Another said, “We do for a fact know that the ruling, when it is made public, will be in favor of Canada and Mexico.”

WTO rules give the United States 60 days to appeal from the date the report is published.

If the ruling stands and the U.S. refuses to bend, Agriculture Minister Gerry Ritz has said Canada is prepared to retaliate against the U.S. with tariffs that would need WTO approval as appropriate to the circumstances.

The U.S. lost a similar ruling earlier, but rather than withdraw COOL, it amended the regulations. Canadian beef and hog farmers said the amended regulations were even worse than the originals.

They hired consultants who estimate the annual cost to Canadian farmers is more than $1.6 billion, mainly because American packers faced higher costs to handle Canadian hogs and cattle, therefore bid less for Canadian livestock, driving down prices for all Canadian livestock because Canadian packers don't need to bid against American buyers.