US Origin COOL Labels are not Cool, says WTO Panel

A WTO panel confirmed on Tuesday, 21 October that the amended version of the US’ country-of-origin labelling (COOL) requirements for livestock and meat imports still violates the non-discrimination requirements featured in global trade rules.

Furthermore, the panel said, the revised measure – enacted in 2013 in response to losing a WTO dispute on the subject – had also increased the “considerable degree of trade-restrictiveness” found in the original case.

Nonetheless, the panel said, the alternative measures proposed by complainants Canada and Mexico did not meet the conditions of being both less trade-restrictive than the US’ amended measure while also making an equivalent contribution to the objective of providing consumer information on origin.

Under the original policy, which was actually a series of instruments enacted under the 2002 US Farm Bill and then revised in 2009, producers were required to inform consumers of meat’s country of origin via a label on the sale package. The label could fall under five different categories, each divided into three sub-categories.

In order to be able to comply with the measure, which required that meat of mixed origin be labelled – even where the cattle were “mixed” right after birth – producers had to regularly monitor and segregate the different cattle and hogs. Processing only domestically-born, raised, and slaughtered meat, on the other hand, did not require such monitoring, making foreign livestock clearly less competitive, the judges found.

Following the 2012 Appellate Body ruling, United States amended the COOL statute in 2013, imposing new point-of-production labelling requirements.

For animals slaughtered in the US, there would be three labelling categories: US origin, US and other countries mixed origins, and imported for immediate slaughter. These labels would indicate where each production step – birth, raising, and slaughtering – occurred.

For animals slaughtered abroad, including specific location information related to the various production steps under the foreign origin label is voluntary, provided that records to substantiate these claims are maintained.

Non-discrimination claims

Canada and Mexico claimed that the amended COOL measure accorded cattle and hogs imported from their respective countries less favourable treatment than that given to American ones. This, they said, constituted a violation of certain non-discrimination provisions of WTO agreements.

The panel found that, similar to the original measure, the amended COOL measure necessitates segregation of meat and livestock according to the origin.

Moreover, the point-of-production labelling requirement in the amended COOL measure, and the removal of two flexibilities provided in the original measure, has actually caused an increase in the number of distinct labels needed for certain types of muscle cuts of mixed origins and those imported for immediate slaughter, and therefore entails more need for segregation.

The panel also said that the increase in both the number of distinct labels and in segregation logically entails a higher recordkeeping burden for US-slaughtered livestock and the resulting muscle cuts of meats.

Taken together with actual US market conditions for imported livestock, the panel said that these showed that the new COOL measure creates an increased incentive in favour of domestic livestock and therefore makes it more difficult for imported livestock to compete in the US market.