CRITICAL ANALYSIS: Business Law and Ethics

Hypothetical: Baby Formula Processing Requirements

For up to a year after birth, baby formula sometimes consti$-$

tutes the sole source of nutrition for an infant. This is a per$-$

iod of rapid growth and brain development that affects key

aspects of a child's long$-$term health, and baby formula must

contain all the nutrients to properly address an infant's needs.

Canadian baby formula manufacturers have long adhered to

specific technical and quality requirements imposed by the

Canadian government. Canada is considering imposing new

processing regulations that are stricter on imported baby

formula than on domestic formula after a scandal over adul$-$

terated baby formula abroad. Unless manufacturers of baby

Chapter $2$ The World Trade Organization $55$

origin. Canada and Mexico stated that there were less$-$trade$-$

restrictive alternatives to COOL, and, in any event, the COOL re$-$

quirements did not fulfill the objective of providing consumer

information on origin. Under the legislation the labels created

confusion and conveyed inaccurate information on the origin

of meat products. Canada and Mexico were successful before

both the WTO panel and the Appellate Body. On May $18,2015,$

the Appellate Body of the WTO issued a fourth and fina l ruling

confirming that US COOL requirements discriminate against

US imports of Canadian cattle and hogs.

Critical Analysis Questions

$1.$ Read the case above and identify and explain the WTO

rules and agreements that are triggered.

$2.$ The Canadian Cattleman's Association $($CCA$)$ noted the

adverse effects of COOL on the Canadian cattle and hog

industry. Which branch of the Canadian government did

CCA contact to request that they commence

proceedings in the WTO?

$3.$ If the United States argued that the Canadian cattle and

hogs were subject to inhumane treatment in Canada,

what article of the GATI could it rely on to justify its

labelling and possibly import restrictions?

formula made elsewhere can illustrate that the new technical

and quality requirements are met, their product wil l not be al$-$

lowed to enter Canada.

Critical Analysis Questions

$1.$ What WTO rules are triggered by the proposed Canadian

measure to impose stricter controls on imported baby

formula?

$2.$ If Canada alleges that it needs to protect the health of

the people in Canada, what are its options under

WTOlaw?