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End COOL System, Canada Urges US

by Mike Godfrey, Tax-News.com, Washington

27 December 2013


Canada continues to pressure the US Government to put an end to its system of mandatory Country of Origin Labelling (COOL).

The Canadian Agriculture Minister Gerry Ritz last week met with members of the US Congress, his US counterpart Tom Vilsack, and US and Canadian industry representatives. Speaking afterwards, Ritz said that he had made his stance on the issue very clear, calling on the US to "do what's best for both our countries and fix COOL in the current farm Bill."

The two sides have been locked in this dispute since the controversial COOL measure was introduced in 2008. Within just months of its implementation, Canada requested World Trade Organization (WTO) consultations with the US. When the talks failed, a WTO panel was convened.

The panel ruled in 2011 that COOL discriminated against foreign livestock and did not fulfil its stated objective. Although the US appealed, the WTO upheld its original decision, albeit with the caveat that there was insufficient evidence to determine whether COOL is more trade restrictive than necessary.

Canada maintains that COOL has significantly disrupted the North American supply chain, created unpredictability in the market, and imposed additional costs on producers on both sides of the border.

A further WTO compliance panel was set up in September, to determine whether COOL has been brought into conformity with the US' WTO obligations. Canada says that the 2013 amended regulations increase the unfair impact of COOL on Canadian livestock and is confident that the WTO will again find the US non-compliant.

The compliance proceedings may include an appeal to the WTO Appellate Body, and Canada has warned that it may seek authorization from the WTO to impose retaliatory tariffs on US imports.

TAGS: compliance | tax | business | tariffs | World Trade Organisation (WTO) | food | trade disputes | Canada | United States | regulation | trade | North America

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