CANADA-US TRADE: COUNTRY OF ORIGIN LABELLING AND COUNTERVAILS

Posted in: Economics, Pork Insight Articles by admin on July 6, 2017

All countries interact with the global marketplace to a greater or lesser degree and many firms prosper as a result of trade, but this is not the case for all firms in a trading economy. The international marketplace is a very dynamic place and it will always be the case that some firms will find that their international competitiveness is declining.

Country of origin labelling is allowed in the WTO, but there are some constraints on its use. Article IX, Marks of Origin, of the General Agreement on Tariffs and Trade ( 1994) allows imported products to be labelled with specific country of origin at the time of import so long as the marking requirement does not seriously damage the imported products, materially reduce their value, or unreasonably increase their cost. It seems likely that either one or both of the italicized outcomes will be able to be strongly argued at the WTO. Unfortunately, it can only be argued after the fact – after there is evidence that value has been reduced or costs increased. As a result, much of the damage would have already been done as the costs of MCOOL are expected to be much larger for the Canadian livestock industries in the short run than in the long run. The materially reduce value and unreasonably increase their cost criteria have never been tested at the WTO so there are no precedents to assist in determining what the dispute panels would consider as materially or unreasonably. As a result, Canada could well lose the case.

CANADA-US TRADE- COUNTRY OF ORIGIN LABELLING

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