For the second time, the World Trade Organization ruled U.S. meat-origin labels are a violation of global trade rules. The ruling, which can be appealed, opens the door to retaliatory tariffs on U.S. goods if the regulations are not modified. Appeals generally are not successful at this stage at WTO but they can delay an adverse decision for a couple of months. Agriculture Minister Gerry Ritz said Canada could consider retaliatory tariffs as early as next year if the United States fails to act, said Canadian Press.
There was no immediate comment from U.S. officials.
WTO said a compliance panel found that U.S. country-of-origin labels “accords to Canadian and Mexican livestock less favorable treatment than that accorded to like U.S. livestock…because it necessitates increased segregation of meat and livestock according to origin; entails a higher recordkeeping burden; and increases the original COOL measure’s incentive to choose domestic over imported livestock.” The Obama administration rewrote COOL regulations in 2013 in the wake of a 2012 WTO ruling against the initial version.
The current version requires labels to list the where food animals were born, raised and slaughtered.
COOL, originally part of the 2002 farm law, became mandatory in 2009 for beef, veal, pork, lamb, goat and chicken meat, whether as cuts or ground. The law also covers seafood, fruits and vegetables.
Meat has been the center of controversy from the start. Foodmakers and the largest cattle and hog producer groups oppose COOL as a costly paperwork burden while consumer groups and the two largest U.S. farm groups say consumers have a right to know about the food they eat.
Roger Johnson, president of the National Farmers Union, said “any changes to COOL to ensure full compliance with today’s ruling should be made administratively while maintaining the integrity of COOL labels.” The consumer group Food and Water Watch said, “The muddy WTO ruling does not warrant a blunt legislative instrument like repealing or weakening COOL.”
Senate Agriculture Committee member Chuck Grassley, a COOL supporter, said “it’s likely time for Congress to go back to the drawing board. Country of Origin Labeling needs to be written and implemented clear of any trade-distorting principles.”
“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,” said two major meat industry groups, American Meat Institute and North American Meat Association. Rather than appeal, the administration should ask Congress to revise the COOL statute, they said. Foes tried unsuccessfully to attach repeal of COOL to the 2014 farm law.
Canada has spelled out dozens of U.S. products that may be subject to retaliation over COOL. The list, issued in June 2013, ranges from meat and livestock to cheese, rise, maple syrup, breakfast cereal, wine, sugar, jewelry, metal pipes, wooden office furniture and mattresses.The Canadian Cattlemen’s Association says COOL cost cattle and hog producers $1.1 billion in 2012. It called on “prohibitively high tariffs on key U.S. exports…including beef” until COOL is reformed.
“COOL is a failed program,” said the National Cattlemen’s Beef Association, a major U.S. trade group, adding “there is no regulatory fix to bring the COOL rule into compliance with our WTO obligations or that will satisfy our top trading partners.
The WTO ruling is available here. The USDA home page for COOL is available here.
This story was originally published in the Ag Insider, a round-up of food, agriculture and environmental health news in your inbox every weekday morning. You can subscribe here.