In a decision welcomed by industry officials and politicians, the World Trade Organization has decided U.S. rules that force country-of-origin labels on Canadian products violate trade agreements.
"It's been a long wait. It's been an expensive wait. But we're very pleased with the decision and hope that we'll be able to move along quickly from here," said Ray Price of the Canadian Meat Council, which represents the packing industry.
While he acknowledged that Friday's ruling found flaws in the American rules, U.S. Trade Representative Ron Kirk suggested his country is unwilling to completely abandon some form of labelling.
"The Obama administration remains committed to ensuring that information on the origin of all food products covered by (country-of-origin labelling) is available to American families so they can make informed purchasing decisions," he said in a release.
Friday's decision was on an appeal of a WTO ruling made last November. At that time, the body found American rules on mandatory country-of-origin labelling of meat products failed to live up to that nation's obligations under international trade law.
Those laws have been criticized on both sides of the border — as well as in Mexico — for disrupting an industry that has come to depend on easy movement of live animals and processed meat products back and forth across the border. They have been blamed for raising prices in the U.S. and damaging Canadian producers.
Canadian government figures say shipments of Canadian cattle into U.S. feedlots declined 49 per cent by 2009, a year after the regulations took effect. Exports of slaughter hogs declined 58 per cent.
In its ruling, the appeal panel wrote the U.S. does have the right to require that consumers be provided information on the source of their food.
However, it decided the American regulations do so in a way that severely discriminate against Canadian and Mexican producers. It found only a small part of the data that non-U.S. producers were required to collect was actually passed on to consumers, while American producers did not have keep such records.
"The (country-of-origin labelling) measure has a detrimental impact on imported livestock because its record keeping and verification requirements create an incentive for processors to use exclusively domestic livestock, and a disincentive against using like imported livestock," says the panel's ruling.
Martin Unrau of the Canadian Cattleman's Association said the extra paperwork required to comply with the U.S. regulations cost Canadian producers $25 per animal. He said his organization has spent over $2 million in its fight against country-of-origin labelling.
"It's an important victory for Canadian producers," he said.
Hog producers were similarly jubilant. Jean-Guy Vincent of the Canadian Pork Council said country-of-origin legislation has cost Canadian hog exporters $1.4 billion.
"(The council) will be working with our American counterparts and others who are U.S. stakeholders to help find an effective and timely legislative end to this irritant," said Vincent.
Federal Agriculture Minister Gerry Ritz said he hopes Canadian producers will start to see better prices for their animals soon.
"I think there's been an attitude change already," he said. "I think producers will expect buyers on the American side to start to honour this relatively quickly.
"The change that's required in legislation will take more time than that — we're in an election cycle in the U.S."
The U.S. has up to 15 months to implement the decision.
"We're hopeful that it will be happening sooner than that," said Ritz.
Price agreed Canadian officials and producers will have to keep the heat on in Washington to ensure regulations actually change.
"We don't believe the work is entirely done yet," he said. "We believe the rule is there and we look forward to working with whatever organizations and officials that we can to ensure the rule is changed and working in the way that it should."
(By Bob Weber in Edmonton)