Thank you, Jurgen.
This committee certainly is aware of what country of origin labelling is. In terms of U.S. legislation it is something that originates in the 2002 Farm Bill.
We were quite content with the final rule that the U.S. administration published in December—that would be the former administration—because it did introduce some additional flexibility. We weren't saying that this was it, we'd never worry about COOL again, but we were certainly supportive of the Canadian government shelving the WTO challenge while some time was taken to determine if the changes that were in the final rule would give some flexibility that U.S. processors would still buy Canadian-born livestock. That's the key. And we were looking for flexibility that was quick to come into place and wouldn't take three to four years, which a WTO case can easily take.
We did realize the hope that the new administration would put the final rule in place, but then to our shock and horror, really, and to that of some of the other U.S. government departments, we think, the new Secretary of Agriculture admonished the industry to go much beyond the COOL law as it was put out in January.
The two big issues were that it was looking for the U.S. processors to put on their packages the location of all of the stages of the value chain of the animal--so where it was raised, where it was processed. It was actually taking us back to something more onerous than what the original 2002 Farm Bill asked for. And it was those technical or excessive requirements of the old Farm Bill that led the then, and now still, chairman of the house agriculture committee in the U.S., Collin Peterson, to say that they had to find a change, they had to find a way to make this more practical. And they did. However, what Secretary Vilsack has done has taken it backwards.
Secondly, Secretary Vilsack is also urging the processors to include processed products. Before, processed products were completely excluded. This is even more challenging for a processor, to have all the different labels that would accommodate every potential situation, such as a pig born in Denmark, raised in the U.S., and processed in Canada. That's all a possibility.
We did put in a letter to ministers Day and Ritz that we feel covers quite well all the elements of the issue. That has been provided to you, as will some text that we weren't able to get into our submission before this morning.
In the hog industry in Canada we've seen our live slaughter hog animal exports fall by two-thirds, by 67%, versus last year, and our feeder pig exports by one-third. These are exports that last year accounted for almost 10% of the U.S. swine supply. We have a letter from Morrell, a major U.S. processor that used to handle, for example, up to two million Canadian pigs a year. They have sent a letter to their producer suppliers saying that they will not be taking any more Canadian-born animals after March 2009. We can provide that letter to you at some point perhaps.
We are pushing, I guess, three or four key points on COOL. One is that it has taken us back to before the U.S. Farm Bill and that the processed product aspect will affect exports from Canada of well over half a billion dollars in value. There is just no alternative for Canadian producers, U.S. hog finishers, and U.S. pork processors to find ready alternatives to this supply.
In our view, because things are so unsettled yet in Washington in terms of getting the right people into senior positions, such as in the trade department and the commerce department, the White House really has to be alerted to this grim situation. And in terms of getting their attention, our view is that it really has to come from our central agency, the Prime Minister's Office in particular, to alert the White House that this is a problem that's not just going to affect Canadians, it's going to affect the U.S. Because if you take away 10% or more of U.S. processors' raw material, they are not going to be able to continue in business as they are. We feel there just has to be more effort made. More attention has to be captured in the U.S. administration to understand this.
We are not suggesting that it needs to be in an adversarial manner at all. It is really a matter of having the facts and the logic explained.
I want to say a few words on the Canada-EU trade and economic partnership, which we are hopeful can be announced on May 6 when the EU and Canada have their next summit.
The Canadian Pork Council strongly supports the negotiation of a comprehensive free trade agreement. We would not at all be accepting of excluding pork from such an agreement. We will be looking very shortly, in days, at the first Canadian pork processing plant to be approved to ship to the EU, and we fully expect others to follow. It's a market of 500 million people that we are determined to make better inroads into than we have up to now.
Thank you.