Canada initially requested that the WTO become involved back in December, alleging that the COOL system, which requires origin labeling of meat products as well as some fresh produce in the US, has damaged its export market. Under the system, US meat processors have been required to handle and label Canadian products separately, leading many of them to simply exclude Canadian products. Moreover, Canadian producers have said that the rules have produced a glut on local markets, thereby depressing prices.
The US blocked Canada’s first request, on October 23, for a WTO panel to be established. However, its second request, presented on Thursday, was accepted, as members are only allowed to block the formation of a panel once under WTO rules. The panel is expected to issue its report in summer or fall 2010.
Although the WTO cannot force compliance with its rulings, it can authorize commercial sanctions against countries that ignore the rules.
Canada’s agricultural minister Gerry Ritz said: “This government puts farmers first and will continue to fight for fair and unfettered access for our Canadian producers and exporters. We are confident that we will win our challenge.”
But the US government has argued that the rules provide transparency for American consumers. It released a statement yesterday in which it expressed “disappointment” at the panel’s establishment, but added: “Nonetheless, we are confident that our measures provide information to consumers in a manner consistent with our WTO commitments.”
Canada initially filed a complaint with the WTO over the rules in December, but shelved it to see how the Obama Administration would deal with the issue. However, it held new WTO consultations with the US in June, and these failed to resolve the issue.
US imports of Canadian livestock were 34 percent lower for the first six months of 2009 compared to the same period last year, according to US Department of Agriculture figures.
COOL applies to beef, chicken, pork, lamb, goat, wild and farm-raised fish, perishable agricultural commodities, ginseng, macadamias, pecans and peanuts.