WASHINGTON – On Nov. 18, the World Trade Organization ruled in favor of Canada and Mexico and made official its finding that the US Country of Origin Labeling (COOL) law violates WTO rules. The US will likely appeal the panel’s decision to the WTO Appellate Body, but most observers believe such an appeal is unlikely to succeed and the result will not change. This will likely pave the way for Canada and Mexico, and maybe other countries, to place punitive tariffs on an equivalent amount of US products, states the Nov. 23 edition of the National Chicken Council’s Washington Report.
If the panel’s decision stands, the US must amend the Agricultural Marketing Act of 1946 and the COOL regulations to conform US law to the WTO panel’s decision or may otherwise resolve this dispute with Canada and Mexico, analysts said.
If the US appeals, which the US Trade Representative is currently considering, it will have one year after the appeal ruling is received to make changes to the law to avoid retaliatory trade restrictions.
Last week, the Food Marketing Institute’s Regulatory Counsel Erik Lieberman, said the World Trade Organization recognized what the supermarket industry had known all along – “that COOL is a protectionist law designed to make it more costly and difficult for retailers to sell imported foods.”
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, Lieberman charged. “We fully agree with the conclusion of the panel that the COOL law fails to provide information in a meaningful way,” he added. “This year, COOL enforcement has become more burdensome than ever, making it challenging for retailers to carry imported meats, produce and seafood. Although the compliance rate for the program last year was 97 percent, this year, inspectors are demanding that more redundant records be maintained – at great cost to grocers.”
Lieberman said the COOL law will need to be repealed or rewritten in order for the US to meet its obligations to global trading partners.