Country of Origin Labeling and Structural Change in U.S. Imports of Canadian Cattle and Beef

Abstract

Mandatory country of origin labeling (COOL) has become a thorny issue in U.S.–Canada bilateral trade relations. We undertake an ex post investigation of the impact of the law on U.S. imports of Canadian beef, feeder, and fed cattle. Using a partial equilibrium framework, we derive U.S. import demand equations for Canadian cattle and beef, and employ the Bai and Perron (1998, 2003) procedure for detecting multiple structural breaks with break points being endogenously determined. We find evidence that COOL may have caused significant structural change in U.S. imports of Canadian feeder and fed cattle. L’étiquetage du pays d'origine obligatoire est devenu un sujet épineux des relations commerciales entre le Canada et les États‐Unis. Dans la présente étude, nous effectuons une analyse ex post des répercussions de la Loi sur les importations américaines de viande de bœuf, de bovins d'engraissement et de bovins finis. À l'aide d'un modèle d’équilibre partiel, nous avons dérivé des équations de demande d'importation de bovins et de viande de bœuf de la part des États‐Unis et nous avons utilisé les tests de Bai et Perron (1998, 2003) pour déceler les ruptures structurelles multiples, dont les points de rupture ont été déterminés de façon endogène. Les résultats de notre étude montrent que l’étiquetage du pays d'origine peut avoir causé un changement structurel considérable sur les importations de bovins d'engraissement et de bovins finis.

How country of origin influences Chinese consumers' evaluation of imported milk?

“…COO is important to signal the quality and safety of food products and is an important informational cue guiding purchase behavior when product information is asymmetric (Bilkey and Nes, 1982; Alfnes, 2004; Verbeke and Ward, 2006; Dekhili and D'hauteville, 2009; Yeh et al , 2010; Holdershaw et al , 2013; Twine and Rude et al , 2016; Xie et al , 2016; Yu et al , 2016). Understanding the impact of COO on consumer behavior has become essential to policy makers and food marketers (Bienenfeld et al , 2016).…”

The Impact of Brand Awareness and Country of Origin in the Advertising Effectiveness of Greek Food Products in the United Kingdom: The Case of Greek Yogurt

“…the country-of-origin effect, which can be attributed to the consumer's belief regarding a product's upgraded quality and the positive image the consumer may perceive for the country of origin [43,46]. This relationship has also been confirmed in the food industry [6,52]. It is also explained by the fact that, according to consumers' beliefs, Greece is a pioneer and has a long tradition in the production of quality yogurt, as a country, which confirms the importance of national stereotypes in the interpretation of the country-of-origin effect [35,96].…”

“…The agri-food products market could not remain an exception to the strength of the “country-of-origin effect”. The nation of origin is frequently seen by consumers as the best predictor of the quality [ 52 ] or safety [ 6 ] of agri-food products, according to pertinent research literature. Moreover, country of origin affects various aspects of consumer behavior, such as intention to pay, preferences, purchase intention, and attitudes [ 53 ].…”

A COOL Tale: Economic Effects of the U.S. Mandatory Country of Origin Labeling Repeal

“…Similarly, De Vila Estenssoro and Anderson (2015) estimate that COOL implementation resulted in a widening of the spread of calf prices between the United States and Mexico. Twine et al (2016) find that the implementation of COOL acted as a structural change in U.S. imports of both feeder and fed cattle from Canada. Additionally, Rude et al (2016) assert that COOL caused structural change in the market for U.S. hog imports from Canada; however, these authors find no evidence of structural change in pork imports from Canada resulting from COOL implementation.…”