Country of Origin Labelling (COOL) legislation, as adopted by the U.S., is market protectionist in nature, constitutes a technical barrier to trade, and is deemed inconsistent with international trade rules including those established by the World Trade Organization (WTO). COOL legislation adds additional implementation and enforcement costs throughout the supply chain which are then being levied against Canadian producers in the form of immense price discounts applicable to livestock exported into the U.S.

The U.S. COOL legislation is predicated on the idea that foreign food, which meets a different safety standard than domestic, should be processed differently and separately from domestic food because the possibility of incongruent food safety standards is thought to create risk to U.S. consumers. As such, foreign foods which are processed in the U.S. must be segregated from domestically sourced foods and undergo separate production, which then creates added costs on Canadian food exports that are processed in the U.S. These added costs result in a discount on Canadian food exports. Country of Origin Labelling, as a marketing policy to help provide information to consumers is not an unacceptable policy, however, its requirements on processing has negatively impacted Canadian producers. 

Furthermore, in contrast to the above description, the U.S. acknowledges that the instituted COOL legislation was never intended to address food safety; rather this legislation governs “marketing issues,” and was only developed to give consumers the right to make informed purchasing decisions based upon the “country of origin.” 

In 2011, the WTO ruled in Canada’s favor, deeming Country-of-Origin Labelling a protectionist measure for the U.S. market. The U.S., who were expected to appeal this decision, were given a deadline of May 23, 2013 to bring their COOL legislation in line with their WTO obligations. The U.S. failed to meet this deadline and has not yet eliminated the aspects from its COOL legislation. In response to their failure to comply, on June 7, 2013, Minister of International Trade, Ed Fast, announced that Canada would begin the process of retaliation pending support of the WTO. A list of commodities which would be considered for trade action was published in the Canada Gazette on June 15, 2013 and indicated a potential surtax of 100% on certain foods, including animal meat products and several other import products. 

Canada has some of the most stringent food production standards in the world, and as a result Canadian consumers benefit from some of the safest food in the world. The concern of different food safety standards, which provide the justification for the U.S. COOL legislation, would be circumvented by the creation of a common food safety standard. Such a standard would easily be implemented given Canada’s existing rigorous food safety environment. By negotiating a common bilateral food safety standard, processing of both U.S. and Canadian foods could occur in the same facility. This would reduce the production-based discount of Canadian goods and would reduce the negative effects of COOL legislation. 

COOL legislation has negatively and profoundly impacted prices paid to Canadian producers on exports into the U.S., such that our entire red meat industry, particularly the pork industry, is at a serious competitive disadvantage and potentially on the verge of collapse. Speedy resolution of the issues caused through the COOL legislation is imperative to prevent the marginalization or complete collapse of the Canadian red meat industry.

Recommendations

That the federal government:

1. Continue to pursue trade action to combat the market protectionist aspects of Country-of-Origin Labelling (COOL) legislation including continued bilateral negotiation, working with the WTO, and pursuing retaliatory measures if necessary. 
2. Take a leadership role in promoting the highest level of international food safety standards and practices applicable to international trade involving all perishable foods and food products, with an aim to unify food safety and quality standards and to eliminate the need for processing segregation of Canadian food from U.S. food.

Submitted by the Medicine Hat and District Chamber of Commerce; Co-sponsored by the Red Deer Chamber of Commerce

The International Affairs Committee supports this resolution