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Weekly Overview: North American Trade War Ahead over Labelling?

27 August 2013

GLOBAL - The imposition of Country of Origin Labelling (COOL) rules could potentially lead to a trade war between the US, Canada and Mexico. US producers, meanwhile, are enjoying strong pork demand but facing higher-than-expected feed prices as well as the relentless spread of the latest pig diarrhoea virus.

Last week, the Mexican and Canadian governments called on the World Trade Organization (WTO) to set up a compliance panel to rule on the Country of Origin Labelling (COOL) regulations imposed by the United States.

The two governments claim that the new regulations have hit Mexican cattle exports and livestock exports from Canada.

They want the panel to rule that the US has not fully complied with its resolutions.

In July 2012, the WTO ruled that the COOL rules imposed by the US are discriminatory and contrary to the principles of the organisation, altering bilateral trade practices in meat that prevailed for years and that allowed the efficient flow trade.

At the last possible moment, the US Department of Agriculture issued a new rule, amending the administrative provisions of COOL, which were intended to comply with the WTO decision.

However, the Mexican and Canadian governments said that the new rule is even stricter than the original and has challenged it in the WTO. Mexico and Canada say it generates more trade distortion.

The WTO panel is expected to be set up next month and the final decision is likely to be taken in the first half of next year.

The past week was a set of mixed signals for the US pork industry at home, according to industry analyst, Steve Meyer. There was good news in terms of strong demand for pork but there are growing fears about a rise in feed ingredient prices.

Although profit potential for farrow-to-finish operations is not as good as it was just a few weeks ago, it is still vastly better than anything producers have seen since 2010, he forecasts.

And finally, on the progress of Porcine Epidemic Diarrhoea in the US, the total number of swine accessions and diagnostic case submissions testing positive for the virus is now 497, according the latest figures from the American Association of Swine Veterinarians (AASV) dated 21 August. That is 36 more than the previous week although the number of states affected remains unchanged.

Jackie Linden

Jackie Linden

Top image via Shutterstock

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