Canadian Farmers Challenge U.S. Labeling Requirements at WTO

Canada is challenging the U.S. country-of-origin labeling (COOL) requirements for beef and pork before the World Trade Organization's Dispute Settlements Body.

Canada is challenging the U.S. country-of-origin labeling (COOL) requirements for beef and pork before the World Trade Organization's Dispute Settlements Body. The Canadian government, backed by several business groups –– including some from the United States, claims that the implementation of COOL requirements is immensely costly, forcing Canadian businesses to expect less money for their beef so they absorb the cost of implementing the requirement. They maintain that COOL is a technical barrier to trade and as such illegal under the WTO. 

"The COOL measure is not intended to address health or safety concerns," Canada said in it's opening statement to the DSB. "The objective of the COOL measure was to distort the conditions of competition in the U.S. market to favor U.S. cattle and hogs compared to imported livestock." 

COOL regulations, overseen by USDA, require that consumers be informed of the country of origin of meat by a label on the sales package. To receive an "A" label, cattle must be born, raised and slaughtered in the US. Meat from cattle with a mixed life –– for example, born and raised in Canada but slaughtered in the United States –– must have a label indicating the mix. 

However, rather than taking issue with country-of-origin labeling as a whole, Canada is challenging the specific country of birth, raising, and slaughter of imported livestock requirements under the policy. 

The Mexican government also has filed a separate challenge similar to that of Canada's, alleging that COOL regulations are responsible for an almost 50 percent drop in the country's cattle trade in recent years. The Mexican oral statement is being heard together with the Canadian and U.S. statements. 

The U.S. government claims that the COOL requirements allow consumer choice, and have been in place for a long time on other products, such as "Canadian Maple Syrup" and "Mexican Tequila." In its opening statement, the United States outlined several ways it says the Canadian and Mexican governments are "dramatically overstating" the situation. 

The bulk of the U.S. counter argument is that it is the market, not the policy that has hurt the Canadians, and that U.S. meat processing plants continue to import Canadian and Mexican cattle. The United States also points to recent significant increases of imported Canadian and Mexican cattle compared to the same time last year. 

Their argument, however, does not address in detail the claim that U.S. slaughterhouses are paying less for imported cattle. 

The Dispute Settlement Body is currently hearing the case, but is not expected to release its ruling for several months. At the hearing, the DSB provided written questions that must be answered in writing by Oct. 1, with an Oct. 22 deadline for filing rebuttal briefs. A second oral hearing will be held in December, with further written submissions through February. 

If the United States loses this WTO dispute case, as many trade policy contacts predict, it will be another issue that farm-state lawmakers will have to address as they write the next farm bill. 

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