Detecting COOL Impacts on United States–Canada Bilateral Hog and Pork Trade Flows

Abstract

This paper examines the impact of mandatory Country of Origin Labeling on American imports of Canadian hogs and pork by testing for structural change. Given the uncertainties over the timing of the implementation and reform of COOL, we implement statistical procedures that endogenously test for structural change over multiple time periods. We find evidence that COOL has impacted U.S./Canada feeder and slaughter hog trade flows. In contrast, we found no evidence of structural change for pork trade flows that could be associated with COOL. [EconLit citations: Q17; C12]. C 2015 Wiley Periodicals, Inc.

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

“…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. COOL-related analyses have considered other industries as well: Johnecheck et al (2010) found that the implementation of COOL may potentially reduce the value of Mexican tomato exports to the United States by 14% to 32% and may result in modest U.S. consumer welfare increases compared to the increased (decreased) surplus of domestic (Mexican) tomato producers.…”