The World Trade Organization (WTO) ruled against US country-of-origin labeling (COOL) requirements which leaves two options for the US: scrap the laws or face sanctions.
Country-of-origin labels on meat products indicate where an animal was born, raised and slaughtered.
Canada and Mexico had complained to the WTO saying that the US practice discriminates against imported livestock, not because consumers are avoiding such products but because cattle farmers do not want to spend money and effort to identify and label imported livestock.
“In light of the WTO’s final decision, and due to the fact that this discriminatory measure remains in place, our governments will be seeking authorization from the WTO to take retaliatory measures against U.S. exports,” reads a joint statement from Canada and Mexico, calling on the US “to repeal COOL legislation and comply with its international obligations.”
“Congress has got to fix this problem,” US Agriculture Secretary Tom Vilsack told Associated Press. “They either have to repeal [COOL] or modify and amend it.”
COOL was required by Congress in 2002 and 2008 farm laws, reportedly to benefit ranchers in the northern United States who compete with their Canadian counterparts. The labels have been revised over the years to comply with WTO requirements but failed to win approval.
This was the fourth and final ruling by the WTO on COOL, ending an eight-year legal battle.
The Canadian Cattlemen’s Association (CCA) issued a statement urging the US Congress to “repeal COOL on red meat” and congratulated the Canadian and Mexican politicians, diplomats and legal teams involved in the case.
“The CCA encourages the Government of Canada to move without delay to request WTO authorization to impose retaliatory tariffs on key US exports. Once that authorization is received later this summer, Canada will be in a position to implement those tariffs,” the statement read.
Bloomberg Business puts the potential retaliatory trade actions from Canada and Mexico at an estimated $2bn.
The chairpersons of both the House and Senate Agriculture Committees, Rep. Mike Conaway (R-Tex.) and Sen. Pat Roberts (R-Kan.) respectively, are seeking to introduce legislation to repeal the labeling requirements in the near future.
“If Congress doesn’t act swiftly, retaliation will wreak havoc on the US economy,” said Conaway. He said he has asked for a committee meeting on Wednesday.
Repealing COOL requirements “is the best step forward,” said Barry Carpenter, President of the North American Meat Institute, the main trade group for meat and poultry processors, calling COOL “costly and onerous.”
Not everyone agrees, however. “Today’s WTO ruling … effectively orders the U.S. government to stop providing consumers basic information about where their food comes from,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.
Tim Reif, Chief Counsel for the US Trade Representative, expressed his disappointment with the ruling which said the US violated trade rules.
“We are considering all options going forward, and will continue to consult with members of Congress and interested members of the public regarding possible next steps,” he said in a statement.