GENEVA – The US may have to stop requiring retailers to display country of origin labels on meat after losing the bulk of its appeal against a World Trade Organization ruling on meat labeling June 29.

In its ruling the WTO Appellate Body said the mandatory COOL violated trade agreements “by according less favorable treatment to imported Canadian cattle and hogs than to like domestic cattle and hogs.” The Appellate Body also agreed that the COOL “has a detrimental impact on imported livestock because its recordkeeping and verification requirements create an incentive for processors to use exclusively domestic livestock, and a disincentive against using like imported livestock.”

However, the Appellate Body reversed an earlier finding that COOL fails to fulfill its goal of providing information on origin. US Trade Representative Ron Kirk said that finding affirmed the US has the right to adopt labeling requirements to educate consumers about the meat they buy.

“The Appellate Body’s ruling confirms that families can still receive information on the origin of their meat and other food products when they shop for groceries," Ambassador Kirk said. "The Obama Administration remains committed to ensuring that information on the origin of all food products covered by COOL is available to American families so they can make informed purchasing decisions.

“We are also pleased that the Appellate Body overturned the initial finding that COOL is more trade restrictive than necessary to provide consumers with valuable information on the food they buy,” he added. “In doing so, the Appellate Body agreed with the United States and declined to accept any of the alternatives that Canada and Mexico claimed we should have used instead.”

COOL labels became mandatory in March 2009. US consumer groups and some agriculture groups supported the measure, saying consumers should have information to distinguish foreign from domestic food products. Meat processors opposed COOL on concerns it would raise costs and disrupt trade.
Canada and Mexico leveled the original complaint against COOL in 2008. A dispute resolution panel ruled in November 2011 that the COOL violated WTO rules on technical barriers to trade. The US appealed the panel’s findings in March.

Canada’s Agriculture Minister Gerry Ritz welcomed the WTO’s decision. Canada has argued that the implementation of COOL in the US had an immediate, negative impact on the Canadian livestock industry. Between 2008 and 2009, exports to the US of Canadian feeder cattle declined 49 percent and exports of slaughter hogs declined 58 percent, according to Agriculture and Agri-Food Canada.

“We are pleased with today’s World Trade Organization appeal decision in favor of our livestock industry,” Minister Ritz said. “Our government has always stood with our cattle and hog producers, in order to create a stronger and more profitable integrated North American livestock industry.”

In the US, trade groups have repeatedly asked the US government to drop its appeal and discontinue the COOL. Bob McCan, vice president of National Cattlemen’s Beef Association (NCBA), said that while the US demands WTO compliance of trade partners, the US should also abide by the same guidelines.

“The World Trade Organization has been extremely clear that mandatory Country of Origin Labeling is a clear WTO violation," McCan said. "This most recent decision is very similar to the initial ruling made more than seven months ago.

"Instead of working diligently to bring the United States into WTO compliance, we wasted three months and taxpayer dollars on an appeal process," he added. "This did nothing more than jeopardize our strong trade relationship with Canada and Mexico, the two largest importers of US beef. The Obama Administration prolonged an issue that could have been resolved quickly."

The National Pork Producers Council said it would urge the Obama administration to abide by the WTO ruling.

“We believed when it was being debated in Congress that MCOOL would be an unnecessary burden to trade,” said R.C. Hunt, NPPC president and a pork producer from Wilson, NC. “We have maintained that belief consistently from the outset, and we will be working to achieve US compliance with today’s WTO decision.”