The Hagstrom Report

Agriculture News As It Happens

USTR may appeal WTO country-of-origin labeling ruling

The Office of the U.S. Trade Representative said today that the United States may appeal a World Trade Organization ruling finding fault with its country-of-origin labeling program for red meat.

Two U.S. farm groups issued competing statements on whether the program should be changed to comply with WTO rules.

A WTO panel confirmed the principle of country-of-origin labeling as consumer information, but said the U.S. program was so complicated that it amounted to discrimination against beef from Canada and Mexico.

“We are pleased that the panel affirmed the right of the United States to require country-of-origin labeling for meat products,” Andrea Mead, a USTR press secretary said in a news release.

“Although the panel disagreed with the specifics of how the United States designed those requirements, we remain committed to providing consumers with accurate and relevant information with respect to the origin of meat products that they buy at the retail level,” Mead said. “In that regard we are considering all options, including appealing the panel’s decision.”

The National Farmers Union, which encouraged Congress to pass the country-of-origin labeling law as part of the 2002 farm bill and to amend it in 2008, said it was “generally pleased” with the WTO ruling.

“We are pleased that WTO agreed that COOL is allowable in principle, giving consumers the right to know the origin of their meat products,” NFU President Roger Johnson said in a news release. “NFU has been a long-time advocate for COOL, playing a key role in the negotiations that led to its inclusion in the 2008 farm bill and working with meatpackers to ensure they follow the law’s intent.”

The WTO found that the way COOL was initiated in the United States provided less favorable treatment to Canadian and Mexican livestock, Johnson noted, and also found that COOL label requirements are not clear in all instances.

“NFU will continue to work closely with the U.S. Trade Representative and U.S. Department of Agriculture to ensure that COOL is implemented to the fullest extent of the law and in accordance with WTO,” Johnson said. “If these results are unsatisfactory, then NFU will push to appeal the decision and continue to fight for U.S. consumers, farmers, and ranchers to ensure COOL is allowed to continue for as long as it takes to get this done.”

The National Cattlemen’s Beef Association, which opposed country-of-origin labeling, called the ruling “strong,” and advised the U.S. government not to appeal it.

NCBA noted that if the ruling holds, Canada and Mexico would gain the right to impose retaliatory tariffs on U.S. products, and said the Office of the U.S. Trade Representative should put pressure on Congress to bring the United States into compliance with the ruling.

“We must act quickly before U.S. farmers and ranchers once again face unnecessary and unfortunate retaliatory tariffs on their products,” NCBA said.

Canadian cattle and hog producers claimed victory, saying they had suffered economic hardship since the United States imposed country-of-origin labeling and that they had a harder time selling their animals in the U.S. market.

“"Since the implementation of COOL in the fall of 2008, the cost to the Canadian cattle producers has been in the hundreds of millions of dollars, it'’s reduced prices, and (there are) higher transportation and handling costs," Canadian Cattlemen’s Association President Travis Toews told the Calgary Herald.

Jurgen Preugschas, an Alberta hog farmer and president of the Canadian Pork Council, said "the Canadian and U.S. livestock industries are so integrated, “what this particular rule did, it made our industry in North America less competitive with the rest of the world," the Herald added.

Canadian hog producers shipped 5 million fewer animals to the U.S. once the rule came into effect, he added.

Canadian International Trade Minister Ed Fast said “COOL’s lengthy processes, paper burden and red tape imposed unfair and unnecessary costs not only on producers but on our entire integrated North American supply chain.”