COOL Compliance Hearings Kick Off at WTO

February 20, 2014

The US’ controversial country-of-origin labelling (COOL) requirements for livestock and meat imports were once again under scrutiny at the WTO this week, as hearings began to determine whether recent changes to the policy have brought it in line with international trade rules.

The dispute dates back to 2008, when Canada and Mexico first challenged the measure as being discriminatory against their own livestock industries (DS384, 386). Nearly four years later, the WTO Appellate Body - which serves as the organisation’s highest court - determined that the US’ COOL policy was indeed inconsistent with international trade rules, confirming an earlier panel ruling on the matter.

Under the original policy, which was actually a series of instruments enacted under the 2002 US Farm Bill and then revised in 2009, producers were required to inform consumers of meat’s country of origin via a label on the sale package. The label could fall under five different categories, each divided into three sub-categories.

In order to be able to comply with the measure, which required that meat of mixed origin be labelled - even where the cattle was mixed right after birth - producers had to regularly monitor and segregate the different cattle and hogs. Processing only domestically born, raised, and slaughtered meat, on the other hand, did not require such monitoring, making foreign livestock clearly less competitive, the judges found.

Following the 2012 Appellate Body ruling, US officials confirmed that they would be amending COOL, with the new policy now requiring that producers disclose clearly an animal’s country of birth, raising, and slaughter, all within a single label. Canada and Mexico quickly challenged the revisions, leading to the formation of a WTO compliance panel last September to review the matter.

... The passage of the new Farm Bill earlier this month kept the amended COOL regulation intact, much to the chagrin of Canada and Mexico.

During the compliance panel hearing this week, which was open to the public, Washington argued that its changes to COOL have indeed brought the US into compliance with its WTO obligations, while also “substantially” increasing the information provided to consumers...

Canada and Mexico argue that the changes actually exacerbate the detrimental impact on their cattle and hog industries. In their view, the elimination of co-mingling in the amended COOL measure undermines the competitive position of Canadian cattle and hogs in the US market.

Questions on accurate information, actual objective

...Despite losing the overall case in 2012, the US had scored a small victory in the Appellate Body ruling, with judges finding that Washington’s goal of providing consumer information qualified as a legitimate objective under the WTO’s Agreement on Technical Barriers to Trade.

However, the complainants have challenged the US’ formulation of the objective of the amended COOL measure as being too narrow. Washington has said that the COOL is designed to provide consumers information on where the livestock from which they get their meat is born, raised, and slaughtered.

According to Ottawa and Mexico City, this is inconsistent with Washington’s earlier statement that its goal is “to provide consumer information on origin,” suggesting instead that this claim is litigation-driven. The US, in turn, claims that the amended COOL measure makes the same contribution to its objective, regardless of how the latter is characterised.

Less restrictive options?

Mexico and Canada also reiterated past claims that there are alternative measures that the United States could apply to achieve its consumer information objective. Washington has said, however, that these proposed alternatives would either not provide consumers with the same level of information, or that these have not been proven to be less trade restrictive.

The Appellate Body had said in 2012 that it was unable to complete its analysis on whether COOL is indeed trade restrictive, as the previous dispute panel had provided inadequate information on less restrictive alternatives.

Next steps

Under WTO rules, the panel must circulate its report within 90 days of receiving the compliance challenge. Given that the panel was established last September, the expected date for the report would have been December 2013. In practice, however, the length of this process varies, taking an average of 15 months.

This has been excerpted from the 20 February 2014 article by the International Centre for Trade and Sustainable Development, and is available in its entirety at http://ictsd.org/i/news/bridgesweekly/184431/.


Topic(s): 
World Economy & Politics
Information Source: 
Canadian News Channel / International News Channel
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