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Update: 10:15, 30 June 2012 Saturday

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WTO rules against U.S. in meat labeling case
WTO rules against U.S. in meat labeling case

The WTO Appellate Body said the U.S. country-of-origin labeling rules, commonly known as COOL, were wrong because they gave less favorable treatment to beef and pork imported from Mexico and Canada,

World Bulletin/News Desk

The United States lost the bulk of its appeal against a World Trade Organization ruling on meat labeling on Friday, meaning it may have to stop requiring retailers to display the country of origin on the meat they sell.

The WTO Appellate Body said the U.S. country-of-origin labeling rules, commonly known as COOL, were wrong because they gave less favorable treatment to beef and pork imported from Mexico and Canada, the countries that brought the case, than to U.S. meat.

The decision gives the United States time to comply and does not immediately alter the labeling rules, but is not subject to further appeal.

The meat labels became mandatory in March 2009 after years of debate. U.S. consumer and some farm groups supported the requirement, saying consumers should have information to distinguish between U.S. and foreign products.

Big meat processors opposed the provision, which they said would unnecessarily boost costs and disrupt trade.

A WTO panel ruled in November that the labeling provision violated WTO rules on technical barriers to trade.

"Country of origin labeling is a lose-lose proposition for all players on both sides of the (border)," said Canadian Agriculture Minister Gerry Ritz, adding that within one year of the law, Canadian feeder cattle exports to the United States plunged by nearly half.

"Today's ruling is a key victory for the livestock industry," he said.

The U.S. labeling law requires grocers to put labels on cuts of beef, pork, lamb, chicken and ground meat or post signs that list the origin of the meat.

The WTO appeal body upheld an earlier WTO finding that COOL violates trade rules by giving less favorable treatment to imported cattle and hogs than domestic livestock.

It reversed an earlier finding that COOL fails to fulfill its goal of providing consumers with information on origin.

The United States highlighted that decision in its response.

"We are pleased with today's ruling, which affirmed the United States' right to adopt labeling requirements that provide information to American consumers about the meat they buy," said U.S. Trade Representative Ron Kirk in a statement on his blog. "The Appellate Body's ruling confirms that families can still receive information on the origin of their meat and other food products when they shop for groceries."

U.S. officials said the ruling allows the U.S. to continue to require country-of-origin labels, but it has to change how it runs the program to ensure it is not a technical barrier to trade.

To be listed as U.S. origin, meat must come from animals born, raised and slaughtered in the United States. Meat from livestock raised in Mexico or Canada for slaughter in the United States must be labeled as a product of mixed origin. Canada and Mexico have sizeable cattle and hog trade with the United States.

The countries have until early September to agree on a reasonable amount of time for the United States to comply - which could be up to 15 months, said John Masswohl, director of government and international relations for the Canadian Cattlemen's Association.

The Canadian industry is seeking legislative changes that could include making the labeling rule voluntary, or labeling livestock according to where they are slaughtered or processed, he said.

"The World Trade Organization has been extremely clear that mandatory Country of Origin Labeling is a clear WTO violation," said Bob McCan, vice president of the U.S.-based National Cattlemen's Beef Association. "This (appeal) did nothing more than jeopardize our strong trade relationship with Canada and Mexico, the two largest importers of U.S. beef."

But Public Citizen, a Washington-based nonprofit organization, said the decision will mean consumers have less access to information about the origin of their food, and health regulators may struggle to track food-borne bacteria.

"The WTO announcing that big agribusiness corporations must be allowed to sell mystery meat here, despite U.S. consumers and Congress demanding these labels, is yet another example of outsourcing our legal system to international commercial bodies that push corporate interests," said Lori Wallach of Public Citizen.

Many U.S. meat-packing plants, especially those near the U.S.-Canada border, either stopped accepting Canadian livestock or bought less due to the increased costs of segregating animals by domestic and foreign origin.

Changing the law would most affect packing plants that were once big buyers of Canadian animals, including those owned by JBS, Tyson Foods, Cargill Inc., Hormel Foods and Smithfield Foods, Canadian farm industry officials have said.

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