WTO rules against US in final COOL appeal

By Spencer Chase

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WASHINGTON, May 18, 2015 - The World Trade Organization (WTO) has once again ruled a U.S. country-of-origin labeling (COOL) rule for meat non-compliant with international trade obligations, setting in motion the potential for billions in economic retaliation by Canada and Mexico.

In the ruling, the WTO said the original compliance panel's ruling “did not err” in most every circumstance. When portions of the previous ruling were overturned, most all reversals fell in favor of Canada and Mexico. The appellate panel upheld previous rulings that the amended COOL rule did indeed unfairly discriminate against Canadian and Mexican livestock by requiring labels of muscle cuts of meat to state where the meat-producing animal was born, raised, and slaughtered.

Lets Talk Food The panel also reversed a previous decision that Canada and Mexico failed to make a “prima facie” - a legal term equating to correct until proven otherwise - case showing that less trade-restrictive measures comparative to the consumer information desires of COOL were readily available. Canada and Mexico will now likely begin the process of economic retaliation, barring any action in the U.S. Congress to repeal the law.
  
The National Cattlemen's Beef Association, the nation's largest grouping of beef producers, has long been opposed to mandatory COOL, saying it isn't compliant with trade rules and has the potential to result in devastating retaliatory action. In a statement, NCBA President Philip Ellis said now that retaliation is even closer to actuality, he hopes Congress will step in.

“We have long said that COOL is not just burdensome and costly to cattle producers, it is generally ignored by consumers and violates our international trade obligations,” Ellis said. “Retaliation will irreparably harm our economy and our relationships with our top trading partners, and send a signal to the world that the U.S. doesn't play by the rules. It is long past time that Congress repeal this broken regulation.”

In a statement, Ron Prestage, the president of the National Pork Producers Council (NPPC), agreed and urged Congress to act on repeal quickly, saying potential retaliatory tariffs would be “a death sentence for U.S. jobs and exports.”

“Unless Congress acts now, Canada and Mexico will put tariffs on dozens of U.S. products,” Prestage said. “I know tariffs would be financially devastating for the U.S. pork industry, and I'm sure they'll have a negative impact on a host of other agricultural and non-agricultural sectors.”


While many producer groups are opposed to mandatory COOL, some remain in favor of it and are disappointed by today's decision. One such organization is the U.S. Cattlemen's Association (USCA), which pointed to the potential for new trade agreements like the Trans-Pacific Partnership as all the more reason COOL should have a place at America's meat lockers. In a statement, Leo McDonnell, a director emeritus of USCA, said COOL is still a valuable consumer information
tool.

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“As other countries move to implement country of origin labeling programs, we are disappointed that today's ruling by the WTO contradicts this growing trend,” McDonnell said in a statement. “With a burgeoning international trade arena, it is vital that today's consumers know where their food products originate. We are asking that consumers have a choice; once the product reaches the store shelves, then it is up to them on where they will lend their buying power.”

Today's ruling is the fourth time the WTO has found the controversial COOL rule out of compliance with global trade regulations.  Last year, the panel ruled the regulations requiring detailed information of where food producing animals were born, raised, and slaughtered gave Canadian and Mexican animals “less favorable treatment than that accorded to like U.S. livestock.”

That ruling, which was disseminated to member states in July and made public in October, added that USDA efforts to make the law compliant only increased “the original COOL measure's detrimental impact on the competitive opportunities of imported livestock in the U.S. market.”   Canada and Mexico complained that the rule increased recordkeeping, incentivized consumers to choose domestically produced meat rather than imported products and forced producers to needlessly segregate meat and livestock according to origin.

House Agriculture Chairman Mike Conaway, R-Texas, wasted no time in scheduling committee action Wednesday on a bill to repeal the COOL law. The measure could be on the House floor next month. 

“As retaliation by Canada and Mexico becomes a reality, it is more important now than ever to act quickly to avoid a protracted trade war with our two largest trade partners,” Conaway said. “I have asked my colleagues on the Agriculture Committee to weigh in on resolving this issue once and for all during a business meeting this Wednesday in a targeted effort to remove ongoing uncertainty and to provide stability.”

Last week, he said he and fellow committee member and California Democrat Jim Costa would be able to move “pretty quickly” on repeal due to the “straightforward” nature of the legislation. The House and Senate are both scheduled to be in Washington this week, but begin a weeklong Memorial Day recess at the end of the week.

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