WTO ruling could spark meat trade war in North America
19/05/2015
For the fourth time, an appeal hearing at the WTO in Geneva found that obligations the US places on meat companies to make a distinction between meat from cattle born, raised and slaughtered in the US and meat from cattle that may have moved across the US’s borders with Canada and Mexico are “inconsistent” with the US’s wider trade obligations.
Complaints against the label of origin rules that the US has in place have come from its two neighbours; all three countries are signatories to the North American Free Trade Agreement (NAFTA). The WTO agrees with the complaints and has said the US should change its position. If it fails to do so, Canada and Mexico could start imposing retaliatory tariffs on US products to compensate for the damage they believe is being caused to their cattle industries. The sums could run to billions of dollars and tariffs may be raised as soon as this summer.
The North American Meat Institute and the US Hide, Skin and Leather Association (USHSLA) have consistently opposed the labelling regulations. After the May 18 announcement, USHSLA president, Stephen Sothmann, said: “It is long past time for this expensive, burdensome, and altogether unnecessary law to be repealed.”
He later explained to World Leather that Canada and Mexico brought this action because the regulations in place at the moment result in their cattle being devalued in the US market and discriminate against Canada and Mexico “for no legitimate reason”.
Mr Sothmann told World Leather that country of origin labelling laws came into force in the US in 2002 after lobbying by “a very narrow sub-section” of the US cattle industry. He said: “It is a protectionist law that forces US meatpackers to provide information on a label for the consumer where specific meat products were born, raised, and slaughtered. So, if a steer was born in the US, raised in Canada, and then transported back to the US for slaughter, even if it was only a few miles back and forth, all of that information must be tracked and communicated to the consumer. This is a massive amount of information and is very expensive to track and implement for information that consumers don’t necessarily want.”
Depending on market conditions, anywhere from 500,000 to 1.5 million head of cattle are imported into the US from Canada and Mexico each year. For pigs, the number is between 1 million and 2 million, mainly imported from Canada.
“If it applied to leathergoods,” Mr Sothmann continued, “it would require one article of leather (such as a bag) to display on the label for the consumer where the hide was produced, where it was wet blued, where it was finished, and then where the final bag was manufactured. The cost of tracking that information is immense.”
Share this story:
