It was cool runnings for Canadian beef and pork producers after the United States government repealed its country of origin labeling (COOL) legislation on Friday, Dec. 18.
Pressure from the World Trade Organization (WTO), which stated that the COOL legislation discriminated against Canadian and Mexican beef and pork, allowed Canada to institute tariffs up to an amount of $1 billion a year. Working with the WTO were the Canadian Cattlemen’s Association (CCA) as well as the Canadian Pork Council to have the law repealed, one that has negatively affected Canadian producers since 2008.
WTO pressures helped repeal the legislation and was seen as a positive step to improving the market for producers, says Rich Smith, executive director of Alberta Beef Producers. He said it removed a major barrier to buyers when purchasing Canadian or Mexican beef and hogs.
“Between the cattle and hog industry, it was costing us $3 billion a year,” explained Smith.
The trouble with COOL is that it created additional costs to buyers to show where an animal had been raised, which became cost prohibitive when buying from outside the United States, explained Smith. What makes things even more difficult with COOL is that animals sometimes are transported back and forth between the countries and that had to be included in the labeling.
The retaliatory tariffs approved by the WTO were a positive step to change, said Smith. The CCA, with support from provincial beef groups used targeted market tariffs that would cause Canada’s largest trade partner to rethink its legislation.
Smith added that the only way the CCA was able to pay for arbitration was from the non refunded portion of beef checkoffs. Producers supported the cause by opting out of the beef checkoff refund.
Producer Tony Saretsky, who has been in the beef business for decades in Ponoka County, said the COOL repeal should have happened sooner considering its negative affects on producers.
“In particular it caused a substantial reduction in our herd,” said Saretsky.
“It (COOL) shouldn’t have happened in the first place,” he added.
One of the industry’s biggest challenges, said Saretsky, is the industry is too polite with the United States policy makers. “We never deal from strength. We’re always the odd man out and we don’t want to offend anybody,” he stated.
With the latest legislation abolishing COOL, Saretsky hopes to find some semblance of normality in the market and suggests there will be a slow but steady acceptance from US buyers.
He feels the real struggle is with the population. Canada’s producers are dependant on exports and while its beef has relatively strong marketing, it is a drop in the bucket compared to the United States’ numbers, said Saretsky.