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Canada Wins The WTO Case

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The World Trade Organization (WTO) recently upheld a Canadian complaint that the U.S. country-of-origin (COOL) legislation is a trade barrier. This win is only the first round in resolving the process as there are a number of alternative actions available for both parties to consider. John Masswohl is the Canadian Cattlemen s Association (CCA) director of government and international relations. Alberta Farmer asked him about the next steps for the Canadian side.

AF:DoyouexpecttheU.S.toappealtherecentWTOjudgmentoncattleimports?

John Masswohl:That s been the usual practice in these types of trade decisions, but we would be encouraging them to consider looking at the alternatives such as negotiating a resolution. The appeal process is supposed to take three months, but there are so many opportunities to stretch this out to a year before there is a decision. The federal government would be presenting additional information to the appeal body as to why the original decision was correct; the Americans would do the opposite. The CCA will be involved in an advisory capacity to the government.

AF:WhatiftheU.S.governmentdoesnotaccepttheWTOdecisionevenafterlosinganappeal.WhatwouldbethenextstepconsideringtheyarenotlikelytochangetheirCOOLlegislation?

John Masswohl:That s being speculative. We felt our arguments were very strong and the U.S. arguments were weak which is why we won the case. We want to resolve this matter and resolution is also in the Americans favour. We see this involving a legislative amendment and not throwing all the legislation out. We see it being very specific to cattle and not involving other commodities under COOL, like seafood. There are a lot of senators and congressmen from states that support COOL for other commodities and we want to give them some comfort and not attack those concerns.

AF:Who,whenandhowistheresolutionnegotiated?

John Masswohl:The actual negotiation is done between the Government of Canada and the American government. It would be up to them to define a resolution. We don t necessarily wait for them to come up with that on their own. The CCA has its own ideas and we would meet with senators and congressmen and industry associations to define what we think the resolution should look like. There are a lot of new players in Congress that don t necessarily know the entire story. We will go to them to tell them we are not afteralltheCOO Lcommodities, we just want to change cattle, its a surgical resolution we are after. The National Cattlemen s Beef Association has been helpful, at their summer meeting they passed a directive that encourages the U.S. trade representative not to appeal and to seek a resolution.

AF:WilltheupcomingUSelectionhaveanimpactonhowandiftheWTOdecisionwillberesolved?

John Masswohl:There is a window of opportunity now, people in Washington have other things on their minds like the state of the economy. What we are pointing out is that this resolution has an economic stimulus for packing in the U.S. They are short of cattle, they have overcapacity in their plants and the U.S. needs these cattle from Canada. U.S. jobs depend on getting these animals and it doesn t cost the U.S. taxpayers anything to fix this problem.

AF:IsusingNAFTAanoptionindealingwiththistradeissue?

John Masswohl:Its a whole different avenue than WTO. There is a double jeopardy provision in NAFTA that once you pick WTO you have to stick with that option.

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Theappealprocessis supposedtotakethree months,butthereare somanyopportunities tostretchthisouttoa yearbeforethereisa decision.

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