Volume 4 Issue 1 • December 6, 2010

In This Issue ...


WTO COOL Second Round Wraps

The second round of WTO oral hearings in the COOL panel with the U.S. proceeded much as expected, producing few surprises. The Canadian legal team was very well prepared and performed quite well during the hearing, held in Geneva, Switzerland on December 1 & 2.  The CCA’s President Travis Toews and staff members Dennis Laycraft and John Masswohl were on hand as advisors to the Canadian government legal team along with representation from the Canadian Pork Council.

From left:  Dr . Dan Sumner, John Masswohl, Ed Farrell, Travis Toews, Dennis Laycraft.  Location is just outside the hearing room in the WTO building.The first day was dedicated to opening statements by Canada, Mexico and the U.S. followed by questions from the Panel to the parties.

The primary arguments heard during the first day included the U.S. claim that COOL does not have protectionist intent, and that it is merely intended to provide consumers with more information. The Panel asked if the U.S. could produce any evidence of consumer demand for COOL prior to the legislation being passed in 2002. Although we feel Canada was very convincing in its efforts to demonstrate the true protectionist intent of COOL through the statements of U.S. lawmakers, it would be rare for a panel to state that a country’s intent is anything other than what they say it is. Nevertheless, we feel that the panel has an accurate image of the true intent of COOL due to Canada’s efforts.

The U.S. placed more emphasis on their argument that COOL does not require segregation. The U.S. had previously argued that there are many options available to packers in order to track the origin of cattle, including the use of the mixed origin label. This time the focus was on the availability of the mixed origin label. The Canadian team pointed out that although the COOL regulation appears to allow flexibility to use the mixed label, the reality is that when U.S. packers informed cattle suppliers of their intent to do just that they were met with a swift reaction from U.S. legislators. The alleged flexibility, which was relied heavily upon in the U.S. defense in Geneva, does not exist.

With respect to the economic evidence presented by Canada and Mexico, the U.S. made little effort to refute the analysis. They blamed reduced trade in 2009 on the recession. They also pointed out that Canadian cattle exports to the U.S. increased 7 per cent in 2010 and Mexican cattle exports rose 30 per cent in 2010 and both are receiving “high prices” in the U.S. market.  Canada pointed out that cows and bulls should not be included in the data comparison since meat from these animals is typically not marketed as muscle cuts at retail. Moreover, if the U.S. had excluded cow and bull imports, their data would be more similar to Canada’s.

Unlike the question and answer (Q&A) period at the September hearing, where the economic arguments presented by Canada and Mexico were barely touched, the Dec. 1 Q&A session opened on this topic, providing Dr. Dan Sumner an opportunity to engage directly with the Panel.  Dr. Sumner very adeptly demonstrated that a clear differential between U.S. and imported cattle and hog prices had emerged since the implementation of COOL and the recession could not have affected imported livestock prices disproportionately from U.S. prices.

Dr. Sumner’s comments seemed to hit the mark with the panel. They asked him several questions, including how the results of his analysis would have been affected if he had made different assumptions and run his models in different ways. Dr. Sumner indicated that he had considered the various alternatives posed by the Panel and they did not significantly affect the results, but he would elaborate further in the written responses.

Regarding the U.S. team’s preparations on the economic side, the Panel asked the U.S. why it had not included any analysis on the impact in the hog market in its presentation. Although we believe the answer to this question would have been that such analysis could not have helped the U.S. defense, the answer the U.S. gave is that they did not have time to do any analysis of the hog markets.

The first part of the second day was reserved for third parties to make statements and for the parties to comment on those statements. The Panel had the opportunity to ask questions based on the third party statements. Statements were made by Australia, Brazil, Colombia, European Union (EU), Japan and New Zealand. Most of the statements were on WTO interpretations largely defending the intervenor’s position on some other issue.

The most surprising substantive point coming out of these statements was a suggestion by the EU that an alternative that the U.S. should have considered was a comingling provision. The EU suggested allowing ‘A’ label meat to receive a ‘B’ label on the basis of comingling over an extended period of time – they proposed one year. 

There was also a discussion on the suggestion by Mexico that implementation of a national livestock traceability program in the U.S. would have been an alternative to COOL.  In the U.S. response, it was stated that this idea was rejected as potentially too expensive for the industry. Canada jumped on the U.S. response pointing out that it is acceptable to the U.S. to impose costs on livestock producers in other countries, but not those in the U.S. 

The closing statements by all three parties were largely repetitive of arguments already made, with the U.S. suggesting Canada and Mexico had provided no evidence whatsoever on one point and no arguments on another point. Clearly that was not the case, as Canada and Mexico had provided evidence and made arguments on the points in question.

The panel adjourned at the end of the second day without the need to return for a third day as had been scheduled.

As to next steps, plenty of work lies ahead. The Panel will provide its written questions to the parties by Monday, Dec. 6. Written responses are due Dec. 20.  Comments/rebuttals on responses are due Jan 6.  We expect we will have a confidential decision of the Panel in early June with the final report issued late July.

In terms of a prediction, the legal team cautions that it is virtually impossible to predict an outcome based on how it went in the room, even if it appeared to go very well. One thing that is certain is that the Canadian team performed very well in both the first hearing in September and again at the second hearing.


Council supports farmed animal health and welfare in Canada

Canfax Market BriefsThe newly formed National Farmed Animal Health and Welfare (NFAHW) Council has met and accepted the responsibility for advising stakeholders on the implementation of the National Farmed Animal Health and Welfare Strategy (NFAHWS).

The council, supported jointly by federal, provincial and non-government partners, includes members from animal industry groups, academia, and federal and provincial governments. Dr. Wayne Lees, Chief Veterinary Officer of Manitoba Agriculture, Food & Rural Initiatives, and Rob McNabb, General Manager of Operations of the CCA, were named co-chairs recently at the council’s inaugural meeting.

The CCA has been a strong supporter of the NFAHWS. By accepting a leadership role in this initiative, the CCA will continue to ensure that the Canadian beef cattle industry remains competitive in the world marketplace.

The NFAHW Strategy offers guidance in areas of policy development and programming, as well as providing recommendations for predicting and responding to issues faced by the Canadian farmed animal sector while accounting for Canadian public interests. Areas to be considered will include the increasing globalization of trade, emerging zoonotic diseases and the environmental impact of farmed animals.

In addition to providing ongoing advice to governments and industry on the implementation of the strategy, the NFAHW Council will facilitate industry-government collaboration and align animal health and welfare activities to help meet current and future challenges.

“Over the past century, Canada has earned and enjoyed an enviable reputation for its animal health programs and the health status of its farmed animal sectors,” said McNabb. “Governments, livestock industry groups, and the animal health community must continue to work together to protect animal health and welfare, and maintain this reputation.”


Cattlemen’s Young Leaders program welcomes applicants

The Cattlemen’s Young Leaders (CYL) development program is pleased to report it is already receiving applications for the 16 available mentorship opportunities on offer across Canada in 2011.

Eligible interested parties have until Jan. 25 to apply for the mentorship opportunities, which begin in April and run to December. Beef enthusiasts between the ages of 18 and 35 interested in more information or applying for one of the CYL mentorships can visit www.cattlemensyoungleaders.com.


Corn Distillers’ Grains in Feedlot Diets

Whether or not distillers’ grains are used in feedlot diets depends primarily on cost and availability, but distillers’ grains may affect more than simply ration costs. A number of BCRC funded research projects have been examining the impact of distillers’ grains on animal performance, carcass value, health, food safety and the nutrient value of manure. Researchers at the University of Guelph recently completed one of these studies. Click here to learn what they found out.

CCA Action News

Staff Contributors: John Masswohl, Reynold Bergen
Written, edited and compiled by: Gina Teel and Tracy Sakatch

To sign up for CCA's “Action News”:
Visit www.cattle.ca and click on “Sign-up for Action News”.

For more information, contact:

CCA Communications at feedback@cattle.ca or visit our website at www.cattle.ca

The Canadian Cattlemen's Association is the national voice for nearly 90,000 Canadian beef cattle producers

Head office:
Ste. 310, 6715 8th Street NE, Calgary, AB   T2E 7H7
Phone: 403.275.8558   Fax: 403.274.5686

Ottawa office:
1207, 350 Sparks Street, Ottawa, ON   K1R 7S8
Phone: 613.233.9375   Fax: 613.233.2860