Remy Jurenas Specialist in Agricultural Policy
Joel L. Greene Analyst in Agricultural Policy
retail food stores are now required to inform consumers about the country of
origin of fresh fruits and vegetables, fish, shellfish, peanuts, pecans,
macadamia nuts, ginseng, and ground and muscle cuts of beef, pork, lamb,
chicken, and goat. The rules are required by the 2002 farm bill (P.L.
107-171) as amended by the 2008 farm bill (P.L. 110-246). Other U.S. laws have
required such labeling, but only for imported food products already
pre-packaged for consumers. The final rule to implement COOL took effect
on March 16, 2009.
Both the authorization and implementation of country-of-origin labeling (COOL)
by the U.S. Department of Agriculture’s Agricultural Marketing Service
have been controversial. Much attention has focused on the labeling rules
that now apply to meat and meat products. A number of livestock and food
industry groups continue to oppose COOL as costly and unnecessary. They and
the main livestock exporters to the United States—Canada and Mexico—view the requirement
as trade-distorting. Others, including some cattle and consumer groups,
maintain that Americans want and deserve to know the origin of their foods,
and point out that many U.S. trading partners have their own import
Less than one year after the COOL rules took effect, Canada and Mexico used the
World Trade Organization’s (WTO’s) trade dispute resolution process to
challenge some features that apply to labeling meat. Both countries argued
that COOL has a trade-distorting impact by reducing the value and number
of cattle and hogs shipped to the U.S. market. For this reason, they argued
that COOL violates WTO trade commitments agreed to by the United States.
On November 18, 2011, a WTO dispute settlement (DS) panel found that (1)
COOL treats imported livestock less favorably than like U.S. livestock
(particularly in the labeling of beef and pork muscle cuts), and (2) COOL
does not meet its objective to provide complete information to consumers on the
origin of meat products. The panel reached these conclusions by examining
the economic effects of the measures taken by U.S. livestock producers and
meat processors to implement COOL, and by accepting arguments that the way
meat is labeled to indicate where the multiple steps of livestock birth,
raising, and slaughtering occurred is confusing.
On March 23, 2012, the United States appealed the panel report to the WTO
Appellate Body (AB). On June 29, 2012, the AB upheld the DS panel’s
finding that the COOL measure treats imported Canadian cattle and hogs,
and imported Mexican cattle, less favorably than like domestic livestock,
because of its record-keeping and verification requirements. The AB, however,
reversed the panel’s finding that COOL does not fulfill its legitimate
objective to provide consumers with information on origin. The Obama
Administration welcomed the AB’s affirmation of the U.S. right to adopt
labeling requirements to inform consumers on the origin of the meat they
purchase, but did not signal what steps might be considered to address the ‘less favorable
treatment’ finding. Participants in the U.S. livestock sector had mixed
reactions, reflecting the heated debate on COOL that occurred over the
last decade. Two consumer groups expressed concern that this WTO decision
further undermines U.S. consumer protections.
If the United States decides to bring COOL into compliance with the AB finding,
WTO rules call for that to occur within a reasonable period of time.
Options would be to consider regulatory and/or statutory changes to the
COOL regulations and/or law. If the United States does not comply, Canada
and Mexico would have the right to seek compensation or retaliate against imports
from the United States.
Date of Report: July 3, 2012
Number of Pages: 35 Order Number: RS22955 Price: $29.95
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