WTO knocks COOL out cold

Is this really the end of Country of Origin Labelling (COOL), a protectionist policy that has cost Canadian livestock producers, U.S. meat packers and American consumers countless billions of dollars since its inception in 2008?

There are have been so many false starts and dashed hopes that it’s hard to believe U.S. legislators are finally backing down on a policy they have pigheadedly pursued for eight years, despite numerous rebukes by the World Trade Organization (WTO).

Yet there are signs Congress is moving — belatedly and grudgingly — to dismantle a policy that purported to provide American consumers with choice, quality and safe food, when all it really did was increase costs for producers, processors and consumers, with no public health and safety benefits at all.

In fact, the only beneficiaries of the policy were some U.S. livestock producers, whose outsized political clout enabled them to hornswoggle the U.S. government into establishing non-tariff barriers to either prevent Canadian and Mexican livestock from entering the U.S market or make it prohibitively expensive to do so.

So what precipitated this unprecedented repudiation of protectionism in the guise of consumer protection?

On Wednesday, the House of Representatives agriculture committee voted 38-6 to cancel COOL, after the U.S. exhausted all avenues of appeal before the WTO.

“In light of the WTO’s decision and the certainty that we face significant retaliation by Canada and Mexico, we cannot afford to delay action,’’ said Mike Conaway, a Texas Republican and chair of the congressional agriculture committee.

On Monday, the WTO ruled against the U.S. government’s second and final appeal of the WTO’s 2011 decision that COOL was discriminatory to Canadian and Mexican beef and pork producers under international trade law.

In fact, this was the fourth time the WTO had ruled that COOL was not a consumer protection measure, but a “blatantly protectionist’’ policy that “discriminates against Canada,’’ according to federal Agriculture Minister Gerry Ritz. (I may not agree with Mr. Ritz on many things, but he has my full support on this issue.)

Even before the WTO rulings, the handwriting was on the wall for COOL.

A recent study by the U.S. Department of Agriculture indicated COOL cost U.S. livestock producers, meat packers and retailers about US$2.6 billion a year. Moreover, the USDA report showed COOL provided little or no “measurable economic benefit’’ to consumers.

While COOL was supposed to inform consumers where their pork or beef products originated from, there was no evidence Canadian or Mexican beef or pork from animals fed and slaughtered in the U.S. posed any greater risk to public health than domestic meat products. In addition, U.S. safety standards were being maintained through meat inspections by USDA officials at the border.

Despite its negligible effect on consumer choice and safety, COOL imposed billions of dollars of extra costs on U.S. ranchers, meat packers, and retailers. who had to separate foreign-born from domestic animals from the moment they crossed the border until they ended up on store shelves.

Not surprisingly, COOL had a chilling effect on demand for Canadian and Mexican livestock.

Industry officials estimate the damage done by COOL to Canadian pork and beef producers at $1 billion a year. Canadian hog producers estimated the total damage at more than $3 billion, forcing many producers to exit the business. Saskatchewan Cattlemen’s Association chair Bill Jameson put the total impact on the Saskatchewan cattle industry alone at about $2 billion.

Of course, any protectionist measure, no matter how ineffectual, expensive and egregious, will have its supporters. Gilles Stockton, a Montana rancher, conjured up ‘one world government’ conspiracy theories to explain why COOL was under attack. “When a popular, common-sense law like COOL is declared trade illegal by an anonymous tribunal of the WTO, you have to wonder what U.S. law is next.’’

One would hope that any law that hurts consumers, producers and businesses on either side of the border for no other purpose than reducing competition and fattening the wallets of a handful of individuals would be struck down immediately.

It shouldn’t take eight years, multiple rulings by international trade bodies and billions of dollars of lost sales and additional costs to have them removed from the books.