The World Trade Organization Appellate Body has issued its “compliance report” in the case “United States — Country of origin labelling requirements.” The panel found that the WTO Panel did not err in its previous rulings against the United States and in favor of Canada and Mexico. Those countries had charged that the U.S. country-of-origin labeling (COOL) law for muscle cuts of beef and pork was discriminatory against their imported products.

“The Appellate Body recommends that the DSB (Dispute Settlement Body) request the United States to bring its measures found in this Report, and in the Canada [and Mexico – ed.] Panel Report as modified by this Report, to be inconsistent with the GATT 1994 and the TBT Agreement into conformity with its obligations under those Agreements,” reads the WTO’s conclusion.

“If there ever was any question that that mandatory country-of-origin labeling is a trade barrier that violates our international agreements, the World Trade Organization’s (WTO) ruling against the United States today should lay those doubts to rest.  The WTO has spoken not once, not twice, not three times, but four times in panel and appellate body decisions.  All four rulings found against the U.S.,” stated Barry Carpenter, CEO of the North American Meat Institute. NAMI, as well as several other meat associations and trade groups, have criticized the COOL law since it was first implemented.

“Now, after years of grappling with this costly and onerous rule – a rule that USDA’s own economic analysis says is a burden on livestock producers, meat packers and processors with no consumer benefit – it is clear that repealing the statute is the best step forward,” Carpenter added. “Repeal is particularly warranted given new data released earlier this month by the International Food Information Council (IFIC) Foundation, which shows country-of-origin information maintained its ninth place spot on the list of 11 pieces of labeling information that consumers use when choosing a food product.  Perhaps more importantly, the percentage of consumers saying they use COOL labels has declined markedly from 29 percent in 2013, to 26 percent in 2014 to 15 percent in 2015.  By contrast, half of consumers look for expiration dates and the nutrition facts panel.”

Today’s ruling opens the door for Canada and Mexico to impose tariffs on a number of U.S. products. According to the COOL Reform Coalition, Canada has already issued a preliminary retaliation list targeting a broad spectrum of commodities and manufactured products that would affect every state in the country. Mexico has not yet announced a preliminary retaliation list but has implemented retaliatory tariffs in the past which may be indicative of future tariff actions.

"WTO-authorized retaliation by two of the largest U.S. trading partners could result in very substantial tariffs affecting multiple sectors of the U.S. economy, threatening the livelihoods of American families who depend on U.S. manufacturing," said Linda Dempsey, Vice President of International Economic Affairs at the National Association of Manufacturers, and Co-Chair of the COOL Reform Coalition. 

"More than 95% of the world's consumers live outside of our borders. We flaunt our country's obligations under the rules-based trading system at our peril," said U.S. Chamber Senior Vice President for International Policy John Murphy and Co-Chair of the COOL Reform Coalition. "American farmers, workers, and companies will not be able to sell their goods and services to those consumers if we fail to live up to these rules ourselves. Congress must take action now to repeal the COOL rule for meat before retaliation hits as soon as late summer."

“We look forward to working with Congress to repeal COOL once and for all, so that the United States can comply with its trade obligations, avoid unnecessary retaliation against our products and restore our strong relationships with important trading partners,” Carpenter said.

Source: WTO, NAMI, COOL Reform Coalition