WTO Ruling Could Alter COOL

WASHINGTON — In response to complaints originally filed by Canada and Mexico in December 2008, the World Trade Organization last month ruled that U.S. Country of Origin Labeling rules for meat products violate two articles of its Technical Barriers to Trade Agreement.

While the WTO agreed that the U.S. does have the right to adopt COOL requirements under international trade rules, the panel reviewing the complaints disagreed with the way the rule has been implemented, and decided that COOL in its current form gives less favorable treatment to meat produced by Canadian and Mexican livestock. The decision applies specifically to meat products, but after three years of formal debate, the case will likely set precedents for future trade disputes regarding the use of COOL on products such as seafood and produce.

“In particular, the Panel found that the COOL measure violates Article 2.1 of the TBT Agreement by according less favorable treatment to imported Canadian cattle and hogs than to like domestic products. The Panel also found that the COOL measure does not fulfill its legitimate objective of providing consumers with information on origin, and therefore violates Article 2.2 of the TBT Agreement,” according to a summary report issued by WTO.

U.S. officials will probably appeal the decision.

“We are pleased that the panel affirmed the right of the United States to require country of origin labeling for meat products,” Andrea Mead, press secretary for the Office of the U.S. Trade Representative, said in a prepared response to the ruling. “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. In that regard we are considering all options, including appealing the panel's decision.”

Although COOL still enjoys strong support among many U.S. ranchers, the labeling law's detractors have long argued that it is essentially a mandated marketing program in which minimal benefits to consumers are significantly outweighed by the cost of compliance and recordkeeping. Several industry organizations have already come forward praising the WTO ruling, and urging the U.S. to drop the case and the labeling requirements altogether.

“COOL has forced the industry to spend tens of millions of dollars each year on unnecessary regulatory burdens all for little or no benefit to consumers. We fully agree with the conclusion of the panel that the COOL law fails to provide information in a meaningful way,” Food Marketing Institute Regulatory Counsel Erik Lieberman said in a statement.

Lieberman went on to say that enforcement has recently become “more burdensome than ever,” with inspectors now demanding that redundant records be maintained by grocers.