PROCESS EXPO: Tough talk from Canada on COOL

by Bryan Salvage
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CHICAGO – After pointing out a number of successful trade collaborations between Canada and the United States during the annual North American Meat Association (NAMA) Outlook Conference on Nov. 4 at Chicago’s McCormick Place, Gerry Ritz, Canada’s Minister of Agriculture and Agri-Food, added, “But there’s one thing that doesn’t work and that’s M-COOL [Mandatory Country-of-Origin Labeling]. As I tell my good friend and colleague Tom Vilsack [US Secretary of Agriculture], COOL is a political solution to a problem that doesn’t exist.”

Ritz headed up a Canadian delegation of provincial agriculture ministers and industry representatives who traveled to NAMA’s Outlook Conference .The delegation included Alberta Agriculture and Rural Development Minister Verlyn Olson; Saskatchewan Agriculture Minister Lyle Stewart; Manitoba Agriculture, Food and Rural Initiatives Minister Ron Kostyshyn; as well as representatives from the Canadian Cattlemen’s Association and the Canadian Pork Council.

Canadian federal and provincial governments stood alongside Canadian and US industry to deliver a unified message of the negative impacts COOL is having on both sides of the border during this presentation. On Sept. 25, 2013, a World Trade Organization (WTO) compliance panel on COOL was established in Geneva to determine whether measures found to violate WTO obligations have been brought into conformity. If Canada prevails in the compliance proceedings, which may include an appeal to the WTO Appellate Body, the next step would be for Canada to seek authorization from the WTO to impose retaliatory tariffs on US exports to Canada, Ritz relayed.

“COOL continues to hurt industries on both sides of the border, adding unnecessary red tape, delays and costs to our integrated North American meat industry,” he added. “US legislators have an opportunity now through the Farm Bill to end the economic harm that COOL is [creating] throughout North America. Our government remains committed to pursuing all options available to resolve this dispute — including retaliation.”

Canada has prepared a list of retaliatory measures should the US choose to run with the current COOL as a mandate, Ritz warned meat packers and processors in the NAMA Outlook Conference audience.

“We have completed our consultations with industry and Canadians, who are informed should we get the ‘green light’ from the WTO to retaliate,” he added. “As you are aware, the list includes many of the products marketed by you in this room. I don’t have to tell you the importance of our Canadian market to your ongoing success. With the American cattle herd at all-time lows, [mandatory COOL] is the last thing you can afford. Last year Canadian consumers purchased more than $2.2 billion worth of beef and pork products from the US. With respect to retaliation, our truth is this: these retaliatory measures, should we be forced to bring them into effect, will hurt producers and consumers on both sides of the border. It’s by no means our preferred course of action or of that of anyone in this room, I’m sure.”

Some are betting that Canadians are too polite or fearful to act, Ritz continued. “Let me be clear,” he said. “We will continue to stand with our Canadian cattle and hog producers against COOL in its current form and will use all and any tools available to use to accomplish that. We said all along a legislative fix to COOL is the best way to move forward. And as part of the US Farm Bill that is currently being conferenced, this is an ideal and timely opportunity to fix COOL.”

Canadian cattle have borne the brunt of COOL, Ritz charged. “Canadian industry said it has lost well over $1 billion a year due to lost sales and added costs,” he added. “This number will grow exponentially. Likewise, you in the US industry are feeling the fallout. One study indicated that COOL could potentially result in 9,000 US jobs lost in the packing industry alone…some will tell you it has already begun.”

The education period regarding COOL has come to an end, Ritz proclaimed. “Our American customers are already taking steps to comply,” Ritz said. “Canadian industry was disappointed to learn that Tyson Foods has announced it is not accepting Canadian slaughter cattle for the time being due to the potential extra costs that will be incurred [due to COOL]. Tyson Foods is one of Canada’s major customers — our third-largest buyer [of slaughter cattle].

“Should other companies take similar actions, it will be even more catastrophic,” he added. “For some US packers, Canada supplies half of their throughput. Your industry has identified 10 plants that would be at risk of closing if this new [COOL] rule be fully implemented.”

The Canadian government continues to work with [the red meat] industry on both sides of the border and Mexico to fix this inequality, Ritz pointed out. “We are pleased that the WTO has initiated a compliance panel at Canada’s and Mexico’s request,” he said. “The WTO process takes time — but this is something [Canada does] not have.
“You in this room have been working with our industry to make sure the US Congress knows the hurt COOL continues to cause and we thank you for that,” Ritz continued. “We will continue to work with you to push for legislation from amendments to the Farm Bill that will fix COOL by removing unnecessary discrimination against Canadian cattle and hogs.

“Throughout these troubling times, we have maintained a respectful relationship with our American allies and partners like you,” Ritz told the NAMA crowd. “Canada has consistently made it clear that current COOL regulations discriminate against Canadian livestock. Together with industry, we presented a strong united and rational voice and our concerns were heard by the WTO panel.”

Before telling the NAMA audience about the Canadian angst and anger regarding COOL, Ritz said Canada and the US have developed the world’s largest trading relationship valued at some $700 billion in 2012 alone. “Agriculture is a big-time contributor to that trade relationship — more than $42 billion last year and growing in agriculture,” he added. “All told, the jobs of eight-million Americans depend on trade with Canada, including many in the meat-processing industry.”

Canadian farmers, ranchers, food processors and its economy depend on free and unfettered trader across that border every day, he continued. “For Canada, trade is not an option, it’s a lifeline,” Ritz said.
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