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Country-of-Origin-Labeling final rule gets mixed reactions

Country-of-Origin-Labeling final rule gets mixed reactions
USDA announced new rules for implementing country-of-orginin labeling provisions for livestock imports. Canadian and Mexican officials said the new rules fall short of what's needed for the U.S. to comply with the findings of a WTO dispute panel. Some Canadian officials have joined the Canadian livestock industry in calling for their government to implement retaliatory tariffs to defend producers from what they say is a major threat to the Canadian cattle and pork industries.  

Agriculture Secretary Tom Vilsack says final rules that modify the Country of Origin labeling provisions published Friday (May 24) should satisfy World Trade Organization requirements to bring the original labeling program into compliance and will further strengthen the overall program by requiring origin labeling to include information such as where an animal is born, raised, slaughtered and processed.

But in spite of important endorsements to COOL and its new revisions, reactions to the program have been mixed at best with the U.S. Cattlemen's Association and the National Wildlife Federation providing early support while Cargill officials and Canadian and Mexican meat exporters are saying new revisions only make labeling more complicated and costly.

Canadian Agriculture Minister Gerry Ritz and Trade Minister Ed Fast issued a joint statement Friday indicating the Canadian government is very disappointed with the new rules and says the changes do not bring the United States into compliance with WTO obligations. Last year the WTO maintained its decision and earlier ruling that claimed COOL violated international trade laws and discriminated against Canadian and Mexican meat industries. In July a special body of the WTO gave the U.S. until May 23 this year to amend rules to bring the program into full compliance.

The statement says the latest changes in COOL rules will increase discrimination against Canadian cattle and hogs and increase damages to industry on both sides of the border.

Some Canadian officials have joined the Canadian livestock industry in calling for their government to implement retaliatory tariffs to defend producers from what they say is a major threat to the Canadian cattle and pork industries.

"Canada will consider all options at its disposal, including, if necessary, the use of retaliatory measures,” Fast responded.

'Always a burden'

Canada's agriculture industry has opposed the COOL program since it was enacted in 2009 claiming it forces discriminatory and mandatory labeling requirements on both Canada and Mexico for products sold for retail in the United States. They claim COOL increases processing costs for livestock causing many U.S. slaughterhouses to either refuse taking Canadian-raised cattle and hogs or offer lower prices. Canada's Cattlemen's Association estimates the livestock industry loses in excess of $1.4 billion (including cattle and hogs) each year as a result of labeling requirements.

The Calgary Herald reported Friday that Canadian Cattlemen's Association director John Masswohl is saying the new rules have created more difficulty than ever before by further complicating labeling requirements. According to the report, Masswohl believes the new rules will add to additional costs for Canadian livestock producers who have already absorbed a $25-$40 cost per animal penalty in order to comply with the original program.

It's not just Canadians who are complaining about the new rules.

In a March letter to USDA, Bill Thoni, Cargill's vice president for cattle procurement in the United States said the company's decision to shutdown it's Plainview, Texas, plant in February was due in part to an unreliable cattle supply. The letter expressed concern that the new rules would "create even more difficult segregation requirements that will even further injure production in Canada, Mexico and importantly the United States."

Significant drop

In spite of Vilsack's enthusiasm over the new rules on Friday, industry experts are saying Canadian and Mexican meat imports have dropped significantly over the last fours since the original COOL program was enacted, and additional drops should be expected as a result of the more complicated new rules issued last week.

“USDA remains confident that these changes will improve the overall operation of the program and also bring the mandatory COOL requirements into compliance with U.S. international trade obligations,” Agriculture Secretary Tom Vilsack responded last week.

The final rules modify the labeling provisions for muscle cut covered commodities to not only require the origin designations to include information about where each of the production steps occurred but they also remove the allowance for commingling of muscle cuts.

"Under COOL, retailers must provide their customers with information about the origin of various food products, including fruits, vegetables, fish, shellfish and meats.

Mandatory COOL requirements help consumers make informed purchasing decisions about the food they buy. USDA’s Agricultural Marketing Service (AMS) is responsible for the implementation, administration and enforcement of the COOL regulations," a USDA statement issued last Thursday reads.

The statement says the new rules came about as a result of a June 2012 affirmation of an earlier WTO Panel decision finding that the United States’ COOL requirements for certain meat commodities discriminated against Canadian and Mexican livestock imports and thus were inconsistent with the WTO Agreement on Technical Barriers to Trade.

Canada and Mexico both claim the new rules fall short of meeting WTO obligations and issued statements following Friday's published new rules stating that all options will be considered by their respective governments, including retaliation, if the United States does not comply with the WTO findings.

TAGS: Livestock
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