Canada: COOL A Non Starter In USMCA

When it comes to USMCA in Washington D.C., 27 Congressional Democratic in Congress have signed a petition pressing for “stronger language”.  They’ve also added a clause for reinstatement of Country-Of-Origin Labeling.  A move not welcomed by Canada or Mexico.

Meat Industry players in both countries have spent years fighting for COOL’s repeal on beef and pork products.  Swayed by a WTO final joint-ruling to impose more than $1 Billion in annual retaliation duties, the U.S. Congress repealed COOL in 2015.

Dennis Laycraft, with the Canadian Cattlemen’s Association, was directly involved in the long struggle to get that legislation repealed, and Laycraft.  He said neither Canada or Mexico would even engage in discussions of COOL in the last year’s Free Trade revision negotiations.

“During the negotiations both Canada and Mexico made it very clear that this was a non-starter. We’ve still maintained our rights under the WTO to retaliate if it was brought back. From the coalitions we work with in the mainstream industry, they have no appetite to bring it back. On the surface it may sound good to people, but their own studies done by the US Department of Agriculture showed the high cost of the program and the costs far exceeded any benefits.”

Laycraft believes a return of this meat-labeling specter can be traced directly to some livestock industry fringe groups, including R-Calf and a couple of other splinter groups, who continue to agitate for more “protectionist legislation”.  Laycraft said that while those groups had some short-lived success, those years came at high legal and efficiency costs to North America’s integrated meat packer and distribution system.

“There had been seventeen plants taking cattle from Canada until 2008. That dropped down to six plants that would take Canadian cattle. We could see the way it was shaping up and targeting imported live animals. We believed that we could bring a case. So we went through a number of years where we would win, and it would get appealed, and then we would win again. Not only did we win, but Canada could have a Billion dollars worth of retaliatory duties legally, under the WTO, if the US did not change the policy. The US industry saw that it was delivering no benefits. It was repealed.”

Mexico has already ratified USMCA.  Canada has also pledged to ratify the new deal as is currently negotiated.

The COOL program was not in the original NAFTA agreement. Its legislation was developed during the Clinton era, was passed into law in 2008 under the George W. Bush administration and was implemented by the Obama administration the following year.

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