While it’s the latest in a series of victories, it sometimes doesn’t feel that way. And it won’t feel like a victory until the U.S. accepts the most recent World Trade Organization (WTO) ruling issued this past week.
Once again the WTO has ruled in Canada’s favor by deciding that the United States mandatory country of origin labeling (COOL) rules discriminates against Canada and Mexico exports of beef and pork. That is a violation of the trade agreements that exist between our three nations. It has also resulted in a significant decrease in pork and beef exports to the United States from Canada since its imposition.
Way back in 2008 the United States brought in the mandatory country of origin labeling provisions. This meant that when Canadian beef or pork was brought into an American processing plant they had to be separated from U.S. products and processed at a separate time. That made it difficult and sometimes impossible for U.S. processing plants to take our pork or beef because of the higher record keeping and production costs that were incurred.
The WTO has ruled again and again that this provision violates our trade agreements. Because of repeated appeals and new regulations which have caused delays, this issue has gone on for more than half a decade and could go on longer if the U.S. decides to appeal the most recent ruling. While the World Trade Organization is getting its rulings right in this situation, the dispute resolution mechanism allows an offending nation to drag things on to the detriment of producers who rely on an open and fair market.
Not only is the U.S. violating trade agreements, it is hurting many within their own borders. There are many U.S. processors who would like to accept more Canadian pork and beef but simply cannot because of the burden that COOL regulations impose. They need to listen to many of its own citizens who understand that an open and equal trading system for our livestock benefits both countries.
If the U.S. decides to continue to appeal or ignore the WTO rulings Canada will be permitted to put countervailing tariffs on U.S. products but that is an ineffective solution to a significant problem. What is needed is for U.S. representatives to accept the latest ruling and comply with its terms.
The credibility of our trade agreements and the WTO itself rests on countries following them and the rulings. It’s long past the due date for the U.S. to abide by the WTO decision in relation to COOL. Anything else will leave our livestock producers with a hollow victory.
