WTO COOL Decision
World Trade Organization rules on Canada/Mexico COOL challenge.
The World Trade Organization (WTO) ruled Oct. 20 on a challenge Canada and Mexico made to the current U.S. country-of-origin labeling (COOL) requirements that certain meat product labels in the United States reveal the origins of the product.
The panel found that COOL does accord Mexican and Canadian livestock less favorable treatment than U.S. livestock. It also concluded the amended COOL measure does contribute to providing U.S. consumers with information on origin, countering the complainants' assertion that COOL did not serve that intended purpose.
The WTO has requested the United States come into compliance on the livestock issue.
To read the full panel decision, click here.
NAMA/AMI respond
The North American Meat Association (NAMA) and the American Meat Institute (AMI) issued the following statement on the ruling:
“The WTO decision upholding Canada’s and Mexico’s challenge to the U.S. COOL rule comes as no surprise. USDA’s mandatory COOL rule is not only onerous and burdensome on livestock producers and meatpackers and processors, it does not bring the U.S. into compliance with its WTO obligations. By being out of compliance, the U.S. is subject to retaliation from Canada and Mexico that could cost the U.S. economy billions of dollars.
“While the U.S. has the option to appeal the ruling, we encourage USTR and USDA to instead work together with the industry and Congress to amend the COOL statute so that it complies with our international obligations and brings stability to the market. Such a change would help restore strong relationships with some of our largest and most important trading partners.”
Senate Ag committee chair response
U.S. Senator Debbie Stabenow (D-Mich.), chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, issued the following statement:
“The World Trade Organization has once again ruled that consumers have a right to know where their food comes from,” said Stabenow. “We can spend decades litigating this issue at the WTO, or we can work together to find a solution that encourages international trade and gives consumers what they need to make choices for their families.
“While today’s WTO announcement ruled in favor of the U.S. on the fundamental legitimacy of country-of-origin labeling laws, it also raised concerns about the structure of the COOL program. Sen. Stabenow is committed to protecting the legitimacy of the COOL program and move beyond the litigation for the benefit of producers, processors and consumers.”
NCBA response
The National Cattlemen’s Beef Association (NCBA) issued the following statement:
“The announcement today by the WTO dispute panel on the U.S. country-of-origin labeling rule brings us all one step closer to facing retaliatory tariffs from two of our largest trading partners. Our producers have already suffered discounts and faced the closure of a number of feedlots and packing plants due to the effects of this shortsighted regulation. COOL is a failed program that will soon cost not only the beef industry, but the entire U.S. economy, with no corresponding benefit to consumers or producers.
“NCBA has maintained that there is no regulatory fix to bring the COOL rule into compliance with our WTO obligations or that will satisfy our top trading partners. We look forward to working with Congress to find a permanent solution to this issue, avoiding retaliation against not only beef, but a host of U.S. products.”
NPPC responds
The National Pork Producers Council (NPCC) expressed concern that Canada and Mexico could retaliate by placing tariffs on U.S. pork.
“The United States must avoid retaliation from Canada and Mexico,” said NPPC President Howard Hill, a veterinarian and pork producer from Cambridge, Iowa. “Retaliatory tariffs on pork would be financially devastating to U.S. pork producers.”
NPPC supports an approach to labeling that provides important information to consumers, complies with U.S. international trade obligations and does not undermine U.S. meat supply chains and unnecessarily raise costs.
Editor’s Note: This article is reprinted with permission from www.meatingplace.com. Additional viewpoints below added by Shauna Rose Hermel, Angus Journal editor.
R-CALF responds
“We anticipated this unfavorable WTO ruling and believe, as nearly one-third of the Senate believes, that the U.S. has the tools to address this ruling without weakening or suspending COOL,” said Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA) CEO Bill Bullard.
“While we will be reviewing this lengthy decision to determine what, if any, additional modifications should be made to COOL, we urge the United States to exercise its right to appeal this decision and we fully expect that this dispute over COOL will continue at the WTO for many more months if not years,” Bullard added.
Congress first passed the COOL law in 2002, but heated resistance from international meatpackers delayed its implementation until 2008. Almost immediately, Canada and Mexico, joined by world meat exporters Australia and Brazil, along with five other countries, challenged the U.S. law at the WTO.
In 2012, a three-member WTO panel ruled that livestock from Canada and Mexico were being treated less favorably than U.S. livestock under the COOL law and regulations.
In an attempt to appease the WTO the United States rewrote the implementing regulations for COOL in 2013. The new regulations improved COOL by removing loopholes that had allowed multinational meatpackers to mislabel exclusively U.S. meat with a mixed-country label. It also provided consumers more detailed information regarding where the animal from which the meat was derived was born, where it was raised and where it was slaughtered.
Canada and Mexico renewed their complaints at the WTO, alleging that livestock from their respective countries continue to be less competitive in the U.S. market under the new COOL regulations.
Canada and Mexico also attacked COOL in a lawsuit by filing arguments against COOL on behalf of their respective governments in the U.S. Court of Appeals for the District of Columbia Circuit. The U.S. court ruled against Canada and Mexico and concluded that COOL complies with the U.S. Constitution and that Congress and the USDA had authority to pass and implement the law, respectively.
NFU responds
National Farmers Union (NFU) President Roger Johnson said the ruling can be handled by the USDA and reminded lawmakers of the strong support by the public and in rural America for the labeling law.
“Under the guidance of USDA, any changes to COOL to ensure full compliance with today’s decision should be able to be made administratively while maintaining the integrity of COOL labels,” said Johnson. A May 2013 public opinion poll found that more than 90% of consumers support COOL, and feelings for the labeling law are equally strong in rural America.
“We are confident that given that level of support, Congress will reject all heavy-handed attempts to make legislative changes to this important labeling law,” said Johnson.
This recent ruling will likely take many months to resolve, since it will undoubtedly be appealed, and the WTO process is slow-moving. Just as NFU has played an active role in legally defending this rule in U.S. courts — and has so far won every legal ruling in court — NFU will also work with USDA and U.S. Trade Representative to see that our WTO rights are protected and that we will comply with any final WTO decisions. Now is not the time to change the law. It is the time to see the WTO process through to an ultimate conclusion.
Stockgrowers Vow to Defend COOL
“We’re obviously disappointed in this ruling and continue our strong support of COOL to allow our customers to make informed decisions about the country of origin of their beef,” said Bob Fortune, president of the South Dakota Stockgrowers. “This is not [an] unexpected ruling from the WTO, but we believe that we can find a solution to satisfy our trading partners and still retain strong labeling of the beef we raise in the United States.
“We are encouraged that the WTO has continued to uphold the United States’ right to label products, and that the WTO ruling recommends that the U.S. work towards compliance with our trading partners.
“Stockgrowers and our allies will take time to review the details of this WTO decision, but we remain adamant in our defense of COOL. We urge the U.S. Trade Representative to consider all options for appealing this decision and ask for USDA’s support in recommending regulatory improvements to meet trade compliance.”
