The World Trade Organization (WTO) circulated today the dispute settlement panel report regarding the complaint filed by Canada and Mexico against the United States mandatory country-of-origin  labeling (COOL) for covered commodities, including beef and pork. Certain key findings are as follows:

The panel determined that the COOL measure is a technical regulation under the TBT Agreement, and that it is inconsistent with the United States’ WTO obligations.  In particular, the panel found that the COOL measure violates Article 2.1 of the TBT Agreement by according less favorable treatment to imported Canadian cattle and hogs than to like domestic products.  The panel also found that the COOL measure does not fulfill its legitimate objective of providing consumers with information on origin, and therefore violates Article 2.2 of the TBT Agreement.

In regard to the Vilsack letter, the panel found that the letter’s “suggestions for voluntary action” went beyond concern obligations under the COOL measure, and that the letter, therefore, constitutes unreasonable administration of the COOL measure in violation of Article X:3(a) of the GATT 1994.  The panel refrained from reviewing the Vilsack letter under the TBT Agreement, as it found that this letter is not a technical regulation under the agreement.

In response to the WTO action, the Office of the U.S. Trade Representative (USTR) today issued the following statement in regard to the United States’ right to require country of origin labeling on meat products:

 “We are pleased that the panel affirmed the right of the United States to require country of origin labeling for meat products. Although the panel disagreed with the specifics of how the United States designed those requirements, we remain committed to providing consumers with accurate and relevant information with respect to the origin of meat products that they buy at the retail level. In that regard we are considering all options, including appealing the panel’s decision.”

USTR explained that in December 2008, Canada and Mexico initiated dispute settlement proceedings against the United States related to country of origin labeling requirements for meat products. Among other claims, Canada and Mexico alleged that the COOL statute, COOL implementing regulations, and a USDA letter related to the COOL requirements discriminate against their livestock exports to the United States in breach of WTO obligations. Canada and Mexico also alleged that the COOL requirements were designed to achieve a protectionist objective.

In its final reports, the panel affirmed that the United States has the right under WTO rules to adopt COOL requirements. The panel also confirmed that the United States had not adopted these requirements to achieve a protectionist objective, but rather to provide consumers with information about the origin of the meat products they buy at the retail level. The panel agreed with the United States on other claims, including that labeling under COOL is not required to be on the basis of substantial transformation (where the animal was slaughtered). However, the panel disagreed with the way the United States designed its requirements and determined that they provide less favorable treatment to Canadian and Mexican livestock. Additionally, the panel determined that the COOL requirements fail to fulfill their consumer information objective because the information included on the labels is not clear enough in all instances. The panel also decided that the USDA letter represents an unreasonable administration of the COOL requirements.

USTR will continue to review the panel reports and will work with USDA to help ensure that U.S. consumers continue to be provided with accurate and relevant information with respect to the origin of beef and pork products they buy at the retail level. The next step in the process is for the reports to be adopted by the WTO Dispute Settlement Body (DSB) or appealed to the WTO Appellate Body.

 

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