NEARLY three months after a new country-of-origin labeling (COOL) rule was published by the U.S., the governments of Canada and Mexico have formally requested the establishment of a World Trade Organization compliance panel to review the U.S. law.
First conceptualized as part of the 2002 farm bill and later reworked in the 2008 farm bill, the labeling law calls for the country of origin to be identified on meat products sold in the U.S.
Canada and Mexico successfully challenged the trade-distorting aspects of the COOL law at WTO, forcing the U.S. to go back to the drawing board with an updated rule earlier this year.
Andrea Mead, spokesperson for the U.S. Trade Representative, said the U.S. is disappointed that Canada and Mexico have decided to litigate this matter further and "strongly believe" that the WTO panel will agree with the U.S. in its latest rule.
The most recent revisions call for more specific details. Origin designations for muscle cut covered commodities derived from animals slaughtered in the U.S. are now required to specify the production steps of birth, raising and slaughter of the animal from which the meat is derived that took place in each country listed on the origin designation.
"We are confident that these changes will improve the overall operation of the program while also bringing the current COOL requirements into compliance," Mead said.
According to a joint statement Aug. 19 from Canadian Trade Minister Ed Fast and Agriculture Minister Gerry Ritz, Canada had hoped to avoid having to resort to WTO again to resolve this matter.
"However, despite consistent rulings by the WTO, the U.S. government continues its unfair trade practices, which are severely damaging to Canadian industry and jobs," they said.
"Canada considers that the U.S. has failed to bring its COOL measure into conformity with its WTO obligations. We believe that the recent amendments to the COOL measure will further hinder the ability of Canadian cattle and hog producers to freely compete in the U.S. market," Fast and Ritz added.
Colin Woodall, vice president of government affairs at the National Cattlemen's Beef Assn. (NCBA), was glad that Canada and Mexico finally asked for the compliance panel after wondering whether or not they would pull the trigger.
"We expected this to be the case but didn't expect it to be August," he said.
Both NCBA and the National Pork Producers Council (NPPC) have supported a labeling program that does not undermine U.S. meat supply chains and unnecessarily raise costs.
Woodall explained that NCBA supports market-driven labeling such as Certified Angus Beef rather than government-instituted programs.
NPPC added that it supports an approach that will treat as "U.S. origin" hogs, pork and other meat products that have value added at federally inspected facilities.
The joint statement from Fast and Ritz also noted that Canada will continue to consult with stakeholders as it pursues a fair resolution to the COOL issue.
Canada has released a retaliation list of several important agricultural products that could be taxed at nearly $1 billion. However, the ministers did say the Canadian government will not act on retaliatory measures until WTO authorizes it to do so.
Woodall said a WTO compliance panel likely will issue its decision late this year or in the early part of 2014. The U.S. will have an additional opportunity to appeal that finding, if it desires, which Woodall expects will happen. That appeal would run through most of the winter and early spring of 2014.
Retaliation couldn't occur until at least a year from now or longer, if the case goes that far. Woodall explained that, ultimately, WTO will give Canada and Mexico a maximum of allowed sanctions they can each impose, and the countries can move forward with what they choose.
U.S. beef is "square in the middle" of those threatened sanctions, which is "bad news" for one of the top U.S. beef export markets, Woodall said.
Meanwhile, eight organizations representing the U.S. and Canadian meat and livestock industries filed a lawsuit July 7 in the U.S. District Court for the District of Columbia in an attempt to block implementation of the COOL rule.
"Until the WTO has completed this process, there is no need for (the U.S. Department of Agriculture) and the industry to spend more money on a rule that could be thrown out," Woodall said.
Plaintiffs include the American Association of Meat Processors, American Meat Institute, Canadian Cattlemen's Assn., Canadian Pork Council, NCBA, NPPC, North American Meat Assn. and Southwest Meat Assn.
Attorneys filed documents Aug. 9 on behalf of the U.S. Cattlemen's Assn., National Farmers Union, Consumer Federation of America and American Sheep Industry Assn. seeking to intervene in the litigation and were granted intervener status.
The court has scheduled an oral hearing on the preliminary injunction motion for Aug. 27. Woodall said he expects a decision on the injunction within two weeks.