Part VI of Multi-part COOL Series: R-CALF USA Urges Aggressive Appeal of WTO’s Anti-COOL Ruling
January 30, 2012 Billings, Mont. – The 14 specific examples contained in Parts I through V of R-CALF USA’s multi-part country of origin labeling (COOL) series demonstrate that the World Trade Organization’s (WTO’s) attack on the U.S. country of origin labeling (COOL) law is not only unfounded, but also, sinister. Through its deceptive machinations, the WTO has initiated a frontal attack on the sovereignty of the United States by attempting to strike down a U.S. law passed under the U.S. Constitution.
The purpose of R-CALF USA’s multi-part COOL series is to disclose the WTO’s hypocrisy and wanton disrespect for the citizens of the United States, their cherished Constitution, and their domestic laws passed under their Constitution. In today’s installment – Part VI – R-CALF USA identifies even more sinister acts committed by the WTO against the United States. Below are R-CALF USA’s arguments 15-18 in support of an aggressive appeal of the WTO’s anti-COOL ruling:
The WTO erroneously attributes changes in the volume of Canadian cattle imports almost exclusively to the COOL law, without any consideration for the widely known structural changes Canada made to its cattle industry in response to its significant and lingering disease problem first discovered in 2003. For example, Canada significantly decreased its herd size following its 2003 mad cow disease problem and it significantly increased its domestic slaughter capacity to the point when, in 2007, Statistics Canada reported that Canadian slaughter had hit record highs. These factors alone would significantly reduce the volume of live cattle that Canada would be expected to export to the United States.
Like Canada, Mexico also increased its domestic slaughter capacity by increasing the number of Mexican slaughtering plants eligible to export meat to the United States. And, like in Canada, this additional slaughter capacity would be expected to significantly decrease the number of live Mexican cattle available for export to the United States.
Moreover, Canada’s meatpacking industry underwent a dramatic restructuring change in mid-2008 that left the Canadian cattle industry with but two packers that reportedly control an unprecedented 83 percent of the Canadian market. (See http://www.cjly.net/deconstructingdinner/column_canadianbeefconsolidated.htm). The WTO’s failure to even consider the effects of such a massive structural change that directly impacted the competitiveness of the entire Canadian cattle industry is inexcusable.
The effects of currency exchange rates and increased transportation costs on trade flows are widely known. The WTO should have a better than average understanding of such externalities because, if for no other reason, it is well aware of the widespread claims from the United States and other countries that China purposely undervalues its currency for the purpose of making its exports cheaper and its imports more expensive when compared to the rest of the world. The WTO, however, refused to properly consider the effects of wide-ranging exchange rate fluctuations that occurred after the implementation of COOL and the drastic increase in fuel prices that made it uneconomical to continue shipping live cattle extremely long distances, such as from Canada and Mexico.
R-CALF USA member and South Dakota Stockgrowers Association Director Bob Mack researched historical exchange rates and highway diesel fuel prices for the period Oct. 1, 2006, through Nov. 1, 2011, and found: “The value of the Canadian dollar to the U.S. dollars ranged from a low of $.77 to a high of $1.09 during this period;” and, “Highway diesel ranged from a low of $2.22 a gallon to a high of $4.65 during this period.”
The WTO’s refusal to properly attribute Canada and Mexico’s woes to competitive considerations (i.e., U.S. consumers’ preference for U.S. beef and Canada’s unprecedented packing plant concentration), as well as to externalities such as exchange rate fluctuations and increased transportation costs, clearly demonstrate the WTO’s bias against COOL.
Recall the WTO found only that muscle cut labels were in violation of the national treatment standard while ground meat labels were not. But, of the four muscle cut labels: one for exclusively U.S. meat, one for exclusively foreign meat, and two for mixed origin meat, the WTO could not have possibly found that the muscle cut label for exclusively foreign meat had any impact on imported livestock because those labels are for beef imported as a commodity and the origin is determined by U.S. Customs and Border Protection when the commodity crosses the border.
Further, the WTO erroneously assumed the ground meat label was unlike labels for muscle cuts because it “applies equally to ground meat of imported and domestic origin.” This argument is absurd as like muscle cut labels, a ground meat label cannot claim the U.S. as the sole origin if any foreign meat is included in the package. And, like muscle cut labels, a ground meat label that declares multiple origins must be associated with meat from each multiple country. Importantly, like muscle cut labels, under no circumstances would meat from a country not included on the ground meat label be included in the ground meat package. This is a vitally important similarity, particularly for consumers that may desire to avoid meat from any particular country. Further, the requirement to identify the origins of livestock used for ground meat are identical to those used for muscle cuts as all labels are subject to an audit verification process to verify the authenticity of the labels. In other words, even if all imported livestock were destined for the ground meat market, they all would be subject to the same origin identification requirements applicable to muscle cut labels.
The WTO’s different conclusions in regard to COOL’s effect on livestock used for muscle cut labels versus ground meat label, when all labels require the same origin information, reveals the WTO’s anti-COOL ruling is politically motivated and unjustified with respect to the facts.
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R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. For more information, visit www.r-calfusa.com or, call 406-252-2516.
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This page was last updated on Monday, January 30, 2012.