Changes is WTO Agreements that positively impacts Canadian Producers

November 18, 2011

MINISTER APPLAUDS RULING FROM WORLD TRADE ORGANIZATION ON COUNTRY OF ORIGIN LABELLING

Agriculture, Food and Rural Initiatives Minister Stan Struthers has welcomed the ruling from the World Trade Organization (WTO) issued this morning stating country of origin labelling (COOL) introduced by the United States government is in violation of WTO agreements.
“This ruling proves what we’ve known all along;  these laws discriminate against Canadian producers and distort trade.  They hurt our producers and businesses and have dramatically altered business practice in the formerly integrated North American market,” said Struthers.  “We’ve been there to support our industry through these challenging times and we’ll continue to stand behind producers and ensure they are treated fairly as we move forward.”
The ruling found that:

• Canadian products were treated less favourably than U.S. products,
• COOL created unnecessary obstacles to international trade, and
• COOL did not fulfil a legitimate objective.

The 2002 U.S. farm bill created new mandatory labelling requirements for covered commodities (beef, lamb, pork, fish and shellfish, fruit and vegetables, and peanuts) sold at U.S. retail outlets.  In 2008, these requirements were enshrined in law.  As a result of the implementing regulations, U.S. livestock-processing facilities were required to segregate Canadian and U.S. production.  This had a dramatic effect on Canadian live-animal exports, said Struthers.
The Manitoba government, federal government and several other producer groups argued these laws contravened WTO agreements.
The U.S. had been an important market for Manitoba’s livestock producers, the minister said.  Prior to COOL in 2007, Manitoba producers exported 4.5 million feeder pigs valued at $191 million and 1.6 million slaughter pigs valued at $178 million to the U.S.  In addition, 280,912 of the 516,600 head of feeder and slaughter cattle marketed in 2007 were destined for the U.S., representing a total value of $277 million.
Following the implementation of COOL, Manitoba hog and cattle exports sharply declined and these trends have continued to grow, said Struthers.  For example, in the first year of COOL implementation, exports of slaughter hogs declined 64 per cent from the same period in the previous year.  Exports of feeder pigs were down 19 per cent over the same time frame.  Similarly, exports of slaughter and feeder cattle from Manitoba were down 60 and 33 per cent respectively in the first year of COOL.
“We urge the U.S. government to immediately implement the panel’s findings.  The U.S. is an important and highly valued trading partner and expedited implementation of the ruling will strengthen our trading relationship over the long term,” said Struthers.

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