US touts rules-based trading system, but flouts rules when it suits

Canadian producers of live swine are becoming increasingly frustrated with delays in getting justice from the United States in the WTO dispute over Country of origin labelling (COOL).In 2008, the United States introduced Country of Origin Labelling rules which required (for the first time) labelling focused in part on the birthplace of animals eventually slaughtered in the United States. This thinly-veiled protectionism has created an absurd situation. Millions of baby pigs have been imported into the US from Canada at 18 days old, raised on American feed for several months and then slaughtered. Despite spending less than three weeks of their lives in Canada, under COOL rules these weanlings could never be labelled American product because they were not born, bred and slaughtered in the USA. They are required to be labelled 'product of the United States and Canada'.The labelling regime required more extensive recordkeeping – which made using Canadian swine less attractive than American born animals. Canadian exports to the US of piglets declined by more than a third from over 6.7 million in 2007 to less than 4.3 million in 2013. And, what Canadian exporters could sell was at a significant discount.US Agriculture Secretary Tom Vilsack's letter of February 20, 2009 removed flexibility and our limited comfort with COOL; in response, Canada (and Mexico) challenged the COOL Measure and a WTO Dispute Settlement Panel was established in November, 2009. The Panel concluded that the US COOL measure was inconsistent with their WTO obligations. A US appeal of the Panel decision was rejected by the WTO Appellate Body in 2012.Canada had won twice at this point. After yet another process to determine what would be a reasonable period for the US to comply with the Appellate Body and panel decisions, the WTO gave the US ten months to bring the COOL measure into WTO conformity.On May 23, 2012, the US “complied” by making the labelling rules more detailed and removing what flexibility there was in the system, thus making the situation even worse for Canadian livestock producers.The Government of Canada immediately launched another WTO challenge process – and, in a rare move, published in the June 15, 2013 Canada Gazette a possible retaliation list. This was a dramatic and unprecedented move but the US rejection of the WTO ruling was such a blatant abuse of the process, and flouting of the rules there was no choice but to play hardball.Canada won this challenge too – very convincingly. Normally, one would expect a trading partner to accept these repeated adverse judgments – but the US did not.Our friends and neighbours – three-time losers at the WTO – have appealed again.This is not the way the process should work. Before COOL was introduced, the pigs and pork sector was one of the best examples of cross border specialization resulting from NAFTA. By introducing discrimination in COOL, the US abandoned the spirit of NAFTA in the meat and livestock sector.There are interests in Congress which are prepared to bring COOL into conformity with the WTO after the appeal. Waiting for the results of the appeal simply perpetuates the delay, and increases the harm Candian exporters are experiencing.Congress will seek the views of the Secretary of Agriculture (who up until very recently was a major part of the problem) and the United States Trade Representative – who has overseen and orchestrated the repeated appeals. Canada's pork producer's have no confidence that these agencies will be prepared to support and promote legislation to remove fully and unequivocally the discrimination in the COOL rules which require segregation of Canadian swine – and extra recordkeeping which deprives Canadian hog producers of a natural market.The COOL measure has already cost Canadian livestock producers more than $2.5 billion. We cannot wait any longer to regain markets which the Canada-US Free Trade Agreement and NAFTA deemed should be free. We cannot wait forever for justice.It appears we are headed for a further confrontation with the US – and retaliation against many US exporters. It is a shame the cost of repeated rule-breaking will also be borne by US exporters beyond the beef and pork sectors. However the WTO rules and Canada's rights must be respected. Continuous flouting of the rules – driven by protectionism – and refusal to accept adverse judgments is neither fair nor equitable. It cannot be tolerated in a rules-based international trading system.Jean-Guy Vincent is a hog producer from Sainte-Séraphine, Quebec and Chair of the Canadian Pork Council's Board of Directors.