The Hagstrom Report

Agriculture News As It Happens


WTO issues split ruling on country-of-origin labeling

The World Trade Organization appellate body split ruling today in the country-of-origin-labeling (COOL) dispute between the United States and Canada and Mexico provoked a variety of responses.

The ruling affirmed the U.S. right to adopt labeling requirements that inform American consumers about the meat they buy, but continued to find fault with certain aspects of COOL’s design. Due to COOL’s recordkeeping and verification requirements, the ruling upheld the finding that COOL provides less favorable treatment to Canadian and Mexican cattle and hogs than American livestock.

Canada and Mexico initiated this dispute against the United States in December 2008.

Ron Kirk

Ron Kirk
U.S. Trade Representative Ron Kirk was upbeat.

“The appellate body’s ruling confirms that families can still receive information on the origin of their meat and other food products when they shop for groceries,” Kirk added in a statement. “The Obama administration remains committed to ensuring that information on the origin of all food products covered by COOL is available to American families so they can make informed purchasing decisions.”

“We are also pleased that the appellate body overturned the initial finding that COOL is more trade-restrictive than necessary to provide consumers with valuable information on the food they buy,” Kirk added. “In doing so, the appellate body agreed with the United States and declined to accept any of the alternatives that Canada and Mexico claimed we should have used instead.”

The next step in the process is for the WTO Dispute Settlement Body to adopt its recommendations and rulings, Kirk said. “The United States will then have a reasonable period of time to comply,” he said, adding that USTR has been working with the Agriculture department on compliance.

Jon Wooster

Jon Wooster
“Much of this ruling is good news for U.S. cattle producers,” said Jon Wooster, president of the U.S. Cattlemen’s Association, the San Lucas, Calif., group that favors labeling.

“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,” Wooster said.

“The appellate panel took issue with specific implementation measures regarding how Canadian cattle are segregated and the burden this may impose," he said. "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,” Wooster said. “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

Leo McDonnell
Leo McDonnell, USCA director emeritus from Columbus, Mont., 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,” McDonnell said. “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,” he said. “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.”

Sen. John Tester, D-Mont.

Sen. John Tester
Sen. Jon Tester, D-Mont., a strong advocate for labeling, called the ruling “a slap in the face” to Montanans.

“This irresponsible ruling allows big meat companies to undercut Montana producers with cheap, foreign beef,” Tester said in a news release. “And it denies consumers the right to know where their meat comes from. That’s not fair trade, it’s a slap in the face to Montana ranchers and consumers.”

Food and Water Watch said that the WTO “put the interests of international agribusinesses ahead of consumers” in its ruling, and called on the Obama administration not to comply.

“When the WTO ruled against the U.S. law banning Internet gambling, the United States did not back down and water down the law,” the group said. “The Obama administration should be every bit as vigilant protecting country-of-origin labeling.”

R.C. Hunt

R.C. Hunt
The National Pork Producers Council, which opposes country-of-origin labeling, said that the United States still risks retaliation from Canada and Mexico if it refuses to comply.

“As we work with our government to reform the U.S. labeling regime for meat, we hope the Canadian government will recognize the negative effects its programs have on our producers,” said R.C. Hunt of the Pork Producers board of directors.

The National Cattlemen’s Beef Association, which also opposed the labeling bill, said that by appealing the original ruling the Obama administration had “prolonged an issue that could have been resolved quickly.

“We are committed to working with this administration and Congress to find a permanent solution to this issue in order to bring the United States back into compliance,” the group said. “It is absolutely critical that the United States leads by example.”

World Trade Organization Final Ruling on Country of Origin Labeling