Canada begins WTO case against US meat label law
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By Roberta Rampton
WASHINGTON, Dec 1 (Reuters) - A U.S. meat labeling law is hurting Canadian livestock exports and violates World Trade Organization rules, the Canadian government said on Monday as it took the first step to launch a formal WTO complaint.
Canada requested formal consultations with the U.S. government about its country-of-origin labeling law on Monday, Trade Minister Stockwell Day said.
"We'll always be optimistic and hope that during the consultation phase we can get things resolved," Day told reporters on a conference call.
"But we're showing about how serious we are about this proceeding to the full mechanism. The meter is running as of now," Day said.
The labeling law requires feedlots, packers and processors to keep strict records so retailers can identify on packages where meat was raised and processed.
Canada argues the new rules represent a technical barrier to trade because U.S. buyers have cut back on how many animals they buy and how much they pay because of additional costs.
Last year, Canada exported C$4 billion ($3.2 billion) worth of beef and pork to the United States, its largest export market, Agriculture Minister Gerry Ritz said.
The Canadian cabinet ministers said they warned Trade Representative Susan Schwab and Agriculture Secretary Ed Schafer about the complaint, and Prime Minister Stephen Harper also recently raised the issue with President George Bush.
A spokeswoman for U.S. Trade Representative Susan Schwab declined comment, explaining that Schwab had not yet received Canada's formal request.
Under WTO rules, governments have 60 days for the consultations before the complainant can ask the WTO to strike a panel to hear the complaint.
Canada had considered a complaint under the North American Free Trade Agreement, but Ritz said the WTO process was more expedient and would allow for more livestock exporters, such as Mexico and Australia, to participate if they want.
The case will not be affected by Canada's current political crisis, where opposition parties have said they plan to unseat the minority Conservative government and rule through a coalition, the ministers said. FARMERS ANXIOUS AS U.S. PLANTS STOP TAKING CATTLE
Canadian farmers have long been anxious about the labeling law, known as COOL, because they count on shipping livestock to slaughter in U.S. plants, and also ship young piglets and cattle to U.S. farms where they are fed and then processed.
As many as 1.5 million head of Canadian cattle cross the U.S. border each year, two-thirds of which are destined for plants for immediate slaughter, said John Masswohl of the Canadian Cattlemen's Association.
But 12 of the 15 plants normally in the market for Canadian cattle have stopped accepting the animals because of added expenses. Others have discounted the animals and will only accept them on certain days, he said.
That's costing Canadian ranchers an estimated C$90 per animal, or 7 to 8 percent of their value -- a total of about C$400 million per year, Masswohl said.
It could take years to resolve the WTO complaint, but farmers hope in the meantime that the U.S. Agriculture Department will find ways to ease the impact, Masswohl said.
"If the U.S. could administer this rule with a little more flexibility, they could reduce some of those costs," he said.
(Additional reporting by Doug Palmer; Editing by Christian Wiessner)
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