THE World Trade Organization has given its confidential ruling to governments on whether the U.S. country-of-origin labeling (COOL) requirements for meat are out of compliance with WTO standards. However, the final word on the issues under debate will not be known for several months.
Canada and Mexico challenged the COOL rule for muscle cuts of meat at WTO shortly after the U.S. Department of Agriculture issued the revised rule in May 2013. They argued that COOL has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market, thus violating the WTO Agreement on Technical Barriers to Trade.
The involved parties — the governments of the U.S., Mexico and Canada — now have an opportunity to comment on the interim report provided to them June 27. Findings are expected to be released by July 29 — unless they are leaked before that date. The official report will remain confidential until it is translated, which could be as far out as September.
The end is far from near. After the panel's ruling, parties have 60 days to appeal if they decide to challenge it. Then, an appellate body would issue a final WTO ruling on compliance, which could take an additional six months. If Mexico and Canada win and seek compensation — as they have threatened to do — WTO would have to approve the retaliatory levels.
Ahead of the final WTO ruling, a broader organization called the COOL Reform Coalition sent a letter to congressional agriculture committee leaders asking them to direct the secretary of agriculture to indefinitely suspend the revised COOL rule if it is found to be in violation of international trade obligations.
In November 2011, WTO ruled against a previous version of the COOL rule, finding that it treated imported livestock less favorably than U.S. livestock (particularly for the labeling of beef and pork muscle cuts) and did not meet its objective to provide complete information to consumers on the origin of meat products.
WTO gave the U.S. until May 23, 2013, to bring the rule into compliance. It is that revised rule on which WTO will rule and the coalition is seeking to suspend.
Canada released a list of products against which it would seek retaliatory tariffs — tariffs that would harm all members of the coalition and create severe economic hardship to the U.S. economy.
Although the coalition represents many agricultural groups that have consistently called for a COOL fix — including the National Cattlemen's Beef Assn. and the National Pork Producers Council — the group also includes the U.S. Chamber of Commerce and National Association of Retailers due to concerns stemming from the breadth of the impact the retaliatory tariffs could have on a variety of industries beyond just agriculture.
"We respectfully submit that it would be intolerable for the United States to maintain, even briefly, a rule that has been deemed non-compliant by the WTO. With little potential for quick congressional action after a WTO final adjudication, we request that Congress authorize and direct the secretary of agriculture to suspend indefinitely the revised COOL rule for muscle cuts of meat upon a final adjudication of non-compliance with WTO obligations," the letter stated.
"If Congress fails to ensure that U.S. COOL requirements comply with our international obligations, U.S. jobs and manufacturing will be put at risk," said Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers. "The U.S. helped create the WTO to ensure that all countries play by the rules; U.S. leadership in complying with our own obligations is critical to the United States' ability to address effectively unfair and WTO-violative trade barriers by our trading partners around the world."
A coalition member insisted that the group is not prejudging the final WTO outcome but also knows that there is a real possibility that an adverse ruling will have costly implications.
National Farmers Union (NFU) president Roger Johnson released a statement June 30 saying NFU eagerly awaits the WTO report and will recommend a response if necessary. He said urging Congress to repeal COOL laws before the WTO report is issued is another attempt to prevent consumers from having access to information about food.
"There are many policy or regulatory options — if any are needed — that can be adopted in order to comply, although NFU feels the current COOL regulations are WTO compliant," Johnson noted.