WTO Finds Against U.S. COOL Labeling Rules - Global Trade Magazine
  December 15th, 2015 | Written by

WTO Finds Against U.S. COOL Labeling Rules

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  • The COOL case was brought to the WTO by Canada and Mexico and has been ongoing for seven years.
  • WTO Appellate Body said COOL regs accorded less favorable treatment to imported than to domestic livestock.
  • WTO Appellate Body concluded that COOL measure created incentive for U.S. producers to use domestic livestock.
  • The U.S. faces $1 billion in retaliation on exports by Mexico and Canada if COOL measure is not repealed.

A World Trade Organization appellate panel has found that U.S. country of origin labelling (COOL) requirements for beef and pork violate WTO rules.

At issue was legislation the United States Congress passed in 2002 amending the Agricultural Marketing Act of 1946 and the U.S. Department of Agriculture regulations promulgated under it. COOL requires detailed labeling where livestock was born, raised, and slaughtered.

The case was brought to the WTO by Canada and Mexico and has been ongoing for seven years.

The Appellate Body upheld a WTO panel finding that the COOL measure was inconsistent with WTO standards because it accorded less favorable treatment to imported livestock than to like domestic livestock. The Appellate Body concluded that the least costly way of complying with the COOL measure was to rely exclusively on domestic livestock, creating an incentive for U.S. producers to use exclusively domestic livestock and thus causing a detrimental impact on the competitive opportunities of imported livestock.

The Appellate Body also found that the COOL recordkeeping and verification requirements imposed a disproportionate burden on upstream producers and processors compared to origin information conveyed to consumers.

The National Association of Manufacturers (NAM) welcomed the WTO ruling.

Congress must act immediately to pass a repeal of the WTO-inconsistent COOL provisions and put the United States back into compliance with its international obligations,” said Linda Dempsey, NAM’s vice president of international economic affairs. “At a time of global economic weakness and fierce competition, manufacturers need policies that ensure a level playing field and enhance global opportunities, not ones that create new barriers for our exports. Repeal of these provisions is the only solution remaining that will protect U.S. manufacturing jobs.”

The Coalition for a Prosperous America, a trade policy advocacy group, holds a different viewpoint. “The WTO has repeatedly, but wrongly, ruled that America’s COOL law discriminates against imported livestock in violation of our trade agreements with Canada and Mexico,” said Michael Stumo, the organization’s CEO. “Congress should focus upon taking back its power rather than acceding to transferring that power to global courts. Consumers rely on these labels to inform them of their food and allow them to make informed decisions regarding their meat.”

The U.S. faces more than $1 billion in WTO-authorized retaliation on U.S. exports by Mexico and Canada if the COOL measure is not repealed.