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Copyright © 2014
Angus Journal


U.S. Cattlemen's Association on WTO COOL Final Ruling

The World Trade Organization (WTO) has issued its final decision in the U.S. appeal of a case brought by Canada, and separately by Mexico, against the U.S. mandatory country of origin labeling law (COOL) for beef and pork. The decision affirms the legitimacy of COOL and the guiding principles behind the rule; one inconsistency remains in the implementation of the rule and action with the Obama Administration, not through Congress, can be taken to remedy the issues.

 

In a split ruling, the WTO appellate body upheld the lower panel's affirmation of the United States' right to require country-of-origin labeling for meat and reversed the lower panel's finding that COOL violates Article 2.2 of the Technical Barriers to Trade (TBT) Agreement. The appellate panel also found that COOL achieves a legitimate policy objective by providing consumers with information about the food they eat, reversing the lower panel's finding. The WTO appellate panel agreed with the lower panel that the methods by which meat packers segregate cattle for harvest imposes a burden on Canadian cattle.

"Much of this ruling is good news for U.S. cattle producers," said Jon Wooster, U.S. Cattlemen's Association (USCA) president, San Lucas, California. "The WTO has affirmed the right of the U.S. to require country-of-origin labeling for meat and has reversed the dispute panel's findings that COOL violates Article 2.2 of the Technical Barriers to Trade (TBT) Agreement. The appellate panel took issue with specific implementation measures regarding how Canadian cattle are segregated and the burden this may impose. The findings relate only to technical details of the COOL implementation details. We are very pleased that these issues can be reasonably resolved through the regulatory process and will not require congressional action. USCA will be working closely with the Obama Administration to ensure that any steps taken to implement the WTO findings conform to the requirements of the COOL law and will continue to maximize the benefits of the law for consumers and producers."

Leo McDonnell, USCA Director Emeritus, Columbus, MT said, "There can be no question now, given this final decision by the WTO, about whether the U.S. has the right to require labeling for meat and the higher panel has also ruled that COOL achieves a legitimate policy objective. Fortunately, the remaining issues can be addressed through the regulatory process and not the legislative arena. This decision narrows the regulatory remedies needed to answer the one finding of inconsistency under Article 2.1 of the TBT and bring the U.S. into full compliance with international trade obligations as they relate to COOL. This inconsistency is based primarily on how packers segregate animals in plants to meet labeling requirements. According to the panel, this imposes an unfair burden on Canadian cattle but I am not sure why it costs more to segregate Canadian cattle than U.S. cattle. If the U.S. determines that changes to our regulations may be needed to address these findings, we encourage them to ensure sufficient time to allow all domestic stakeholders to participate meaningfully in that process. Producers can remain confident that USCA will be working with the appropriate agencies as this process unfolds."

Background

In December of 2008 the Canadian government, and separately the Mexican government, requested WTO consultations with the U.S. regarding implementation of the COOL law, which requires retailers to use of four types of labels based on the animal's country of origin, where it was raised and the country where it was harvested and processed. Canada and Mexico argued that U.S. COOL requirements were designed to achieve a protectionist objective and breached WTO obligations by discriminating against Canadian and Mexican livestock exports to the United States.

Consultations did not resolve the dispute and in October 2009 Canada requested that a WTO dispute settlement panel be appointed to handle the case. In November 2011, the dispute settlement panel found that COOL, as implemented, violated provisions of the Technical Barriers to Trade Agreement by providing less favorable treatment to imported Canadian cattle and hogs than for U.S. domestic products and that the law did not meet its objective of providing consumers with information on the origins of meat. In April 2012 the U.S. government appealed the decision. On Friday, June 29 the WTO appellate panel's findings were released.

Current Label Categories

Under COOL, there are four categories of COOL labels to be applied to muscle cuts and a fifth label is reserved for ground meat. Label "A" is reserved for "U.S. Origin" meat and is applied to meat derived only from animals born, raised and harvested in the U.S.

Label "B", or the "Multiple Countries of Origin" label, is used on meat derived from animals not exclusively born, raised and slaughtered in the U.S. Label "C" is used for meat derived from animals imported into the U.S. just prior to harvest. Label "D" is used for foreign country of origin meat. The ground meat labels list all "reasonably possible" countries of origin of the animals from which the meat is derived. Canada and Mexico alleged in their WTO complaint that their respective livestock industries were at a competitive disadvantage because of higher segregation costs at the point of harvest for foreign cattle.

"As noted by the WTO, the mixed origin label does not fulfill the obligations of COOL," noted McDonnell. "We believe that disallowing such nonsense is a great starting point in meeting U.S. international trade obligations. It is crystal clear now that the WTO affirms the right of the United States to require COOL and that the WTO takes no issue with the statute itself. USCA will be working with stakeholders and the Obama Administration to address the technical implementation details and find proper and reasonable resolutions so that consumers can continue to receive the information they need to make informed purchasing decisions and so that U.S. cattle producers can continue to differentiate their product in retail cases."

A copy of the WTO Appellate Body's conclusions can be found on the U.S. Cattlemen's Association web site at www.uscattlemen.org.



Editor's Note: This article is a release from the U.S. Cattlemen's Association.