The World Trade Organization on Monday said the United States' revised Country of Origin Labeling law violates technical barriers to trade agreements because it provides less favorable treatment for Canadian and Mexican livestock.
Both Mexico and Canada have threatened trade retaliation on the rule, with Canada releasing an extensive list of products that could be affected: live bovine or swine, meat of bovine or swine, dairy and produce products – even wooden office furniture.
The compliance panel required to review the rule said in its report dated Oct. 20 that the revised rule requires increased segregation of meat and livestock according to origin and entails a higher recordkeeping burden, in addition to creating an incentive to choose domestic livestock over imported livestock.
The panel's ruling may be challenged within 60 days.
The U.S. Cattlemen's Association, a group that supported the rule on the grounds it provides more information for consumer decision-making, said the WTO decision was disappointing, though the group intends to keep defending the rule.
"The WTO has never said we cannot require country-of-origin labeling," USCA President Danni Beer said in a statement Monday. "The WTO has only explained that COOL has to be implemented in a way that conveys sufficient origin information to the consumer. USCA strongly supported the revised COOL regulations issued in response to that original WTO decision, and we continue to believe those rules are WTO consistent."
USCA suggested a USDA review to determine if there are additional regulatory changes that may permit the U.S. to come into compliance with the WTO without weakening COOL.
"There may still be many months before the WTO process reaches a final result," Beer said. "Today's ruling provides no basis for false alarms about repealing the COOL statute itself."
In a written response to the ruling, Chairwoman of the Senate Ag Committee Debbie Stabenow, D-Mich., also suggested that there's still room for COOL improvement, and that the WTO understands consumers' right to know where their food comes from.
"We can spend decades litigating this issue at the WTO, or we can work together to find a solution that encourages international trade and gives consumers what they need to make choices for their families," she said.
The National Cattlemen's Beef Association, however, said there will be few options for complying with trade obligations and the rule as written at the same time.
“NCBA has maintained that there is no regulatory fix to bring the COOL rule into compliance with our WTO obligations or that will satisfy our top trading partners," NCBA President Bob McCan said in a statement. "We look forward to working with Congress to find a permanent solution to this issue, avoiding retaliation against not only beef, but a host of U.S. products."
The COOL rule also saw its share of discussion in the Farm Bill negotiations at the start of the year; some legislators attempted to ensure it could not be enforced with amendments to the bill, though none were retained in the final bill, signed in February.
View the COOL dispute settlement posted on the WTO website.