The United States lost against the World Trade Organization (WTO)

November 19, 2011

The United States lost against the World Trade Organization (WTO). The WTO dispute panel ruled in favor of Mexico and Canada in saying that U.S. country of origin labeling laws (COOL) constituted an unfair trade protection against foreign producers.

Canada and Mexico are the victors, with a big loss for American Consumers and the United States Loss of National Sovereignty.

The United States Trade Representative will likely appeal the ruling. “Although the panel disagreed with the specifics of how the United States designed those requirements, we remain committed to providing consumers with accurate and relevant information with respect to the origin of meat products that they buy at the retail level,” the U.S. Trade Representative’s office said.

The WTO ruled only on the effect of COOL laws on meat from imported animals. COOL laws are still applicable on other types of food, such as nuts and vegetables.

Some producers found the law to be cumbersome; it represents a major step in ensuring the safety of American consumers. Without accurate information about the origin of their food, Americans cannot make informed decisions about the safety of their food. Imported food may contain drugs and chemicals not approved for use in the United States, and without information about the country of origin tracking and traceability are almost impossible to prevent, source the root of contamination or other problems.

It appears that nearly every action the United States takes to protect its domestic industries is ruled to be illegal by the World Trade Organization.

Ruling applies to other commodities

In addition to cattle and hogs, the ruling applies to lambs, goats, chickens and other commodities that were subject to the strict labeling regime in the U.S. It does not strike the entire labeling system, but applies only to the aspects that discriminate against Canadian agricultural commodities.

Mexico joined Canada in arguing the case at the WTO.

The livestock sector is heavily integrated across the Canada-U.S. border, with many live animals shipped from Canada to processing facilities in the U.S. for slaughter.

When COOL was implemented in 2008, processors had to segregate Canadian animals, process them only on clean or separate lines and package and label the meat separately from that which came from an identical animal born in the U.S.

The additional costs hurt primarily livestock farmers in Canada and Mexico.

“Some processors have simply refused to buy Canadian animals, while others are only willing to buy on certain days or at a deeply discounted price,” Ritz noted, lamenting the decline in efficiency and increase in operating costs on both sides of the border under the American rules.

Some American meat packers and processors sided with Canada and Mexico in the dispute, noting the negative impact on the integrated North American industry as a whole.

“This has been a long road for us in the industry,” said Travis Toews, the president of the Canadian Cattlemen’s Association. “We’re extremely pleased.”

Toews said that the COOL requirements cost the Canadian beef industry “hundreds of millions of dollars in reduced prices and increased transportation and handling costs.” Canadian cattle prices declined by about $100 per animal.

This entry was posted in Uncategorized and tagged , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *