The WTO’s appellate body confirmed that US COOL rules broke its Agreement on Technical Barriers to Trade (TBT) as regards livestock from Canadian and Mexico, and the meat produced from them.
Ottawa and Mexico City argued that the labelling system effectively discriminated against the Canadian and Mexican meat and livestock sectors by insisting labels must indicate when muscle cuts:
*Are from animals born, raised, and slaughtered in the US;
*Animals born and/or raised in a foreign country, raised and slaughtered in the US;
*Animals born and raised in a foreign country, slaughtered in the US;
*Are the product of a foreign country; and
*Are ground meat.
The appellate body ruled that "the recordkeeping and verification requirements of the amended COOL measure impose a disproportionate burden on producers and processors of livestock that cannot be explained by the need to provide origin information to consumers".
Response from Canada has been swift. Canadian Cattlemen’s Association (CCA) president Dave Solverson said: "With a final ruling from the WTO affirming the Canadian beef industry’s right to fair market access firmly in hand, the CCA urges the US Congress to finally repeal COOL on red meat," he said.
And the agriculture minister for Canadian prairie province Saskatchewan Lyle Stewart said: "The WTO decision reflects what we’ve said all along. COOL is unjustifiable discrimination and we are encouraging the United States to recognise this so we can move forward as unified trade partners."
With proposals to scrap the rule now being proposed at the US Congress, one of the American meat sector organisations backing COOL, the National Farmers Union (NFU), called on the US government to start negotiations on the issue with Canada and Mexico.
Its president Roger Johnson said: "Once decisions are handed down, WTO members often work together to find a solution that will work for them. In this case, such a solution must involve continuation of a meaningful country-of-origin labelling requirement."
Meanwhile, the pressure on Washington is rising, with the Canadian government releasing a preliminary list of US exports that could be subjected to WTO-mandated retaliatory tariffs, should COOL stay in force.
Linda Dempsey, vice president of international economic affairs at the USA National Association of Manufacturers, warned: "WTO-authorised retaliation by two of the largest US trading partners could result in very substantial tariffs affecting multiple sectors of the US economy, threatening the livelihoods of American families who depend on US manufacturing."
Following the announcement by WTO earlier this week, legislation to repeal the COOL requirement was introduced by the chairman of the House Agriculture Committee, and approved on Wednesday (20 May) by a bi-partisan vote of 38 to six.