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Ottawa to Impose Taxes if U.S. doesn’t Reconsider COOL Practice

Just two weeks ago we talked about the meat controversy surrounding meat that is shipped from Canada to the United States. The U.S. wants to start once again using COOL  - Country Of Origin Labeling Рpractices on their meat. These labels would tell consumers where their meat was raised, slaughtered, and packaged, so U.S. consumers could know where their meat is coming from. But even the suggestion of such has sparked rage in Ottawa, with this policy costing Canada more than $1 billion a year. Now, Ottawa has plans to fight back, by imposing taxes on everything shipped to the U.S.

Ritz says that the COOL practices go against rulings made by the World Trade Organization, as packaging labels discriminate against foreign livestock. Any taxes Canada would impose on the items shipped between the two countries would also need to be approved by the WTO. This, he says, means that the taxes wouldn’t be introduced before 18 – 24 months time.

“Free and unfettered trade is a two-way street,” Agriculture Minister Gerry Ritz said at a news conference on Friday. “These retaliatory measures, should we be forced to bring them into effect, will affect our producers and consumers on both sides of the border.

“It is by no means our preferred course of action, but we will continue to stand with Canadian hog and cattle producers against mandatory country-of-origin labeling.”

The taxes would be imposed on a long list of items. U.S. cattle, pigs, beef, pork, cheese, pasta, certain fruits and vegetables, chocolate, maple syrup, office furniture, mattresses, and certain types of jewelry. These however, are just a few of the items that will now be taxed when shipping to and from the United States.

Ritz does say that the taxes would force Canadian consumers to pay more for certain items; but he’s hoping the fact that the taxes would cost the U.S. millions of dollars¬†and jobs will be enough to get them to stop the COOL practices.

“There is a possibility of that,” he said when asked if the taxes would affect Canadians. “We are hoping that this will bring enough pressure to the Americans to make the change before this ever has to be implemented.”

But even with the additional cost to Canadian consumers, the government is getting very little criticism for the move so far – especially from those cattle farmers that rely on international consumption of their meat.

Dave Colverson, vice-president of the Canadian Cattlemen’s Association, says he agrees with the taxes, and that they’re a necessary evil when foreign countries won’t play by the rules.

“Country of origin labeling discrimination has cost our cattle producers around $640 million in losses per year since being implemented in late 2008,” says Colverson. “These costs are set to rise under the new amendment to an estimated $90 to $100 per head compared with the $25 to $40 per head hit we currently take.”

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