Trade Compliance

GHY discusses changes to international trade regulations and explores cutting-edge compliance strategies.

WTO Issues Confidential “Interim” Decision on COOL Dispute

Posted July 10, 2014

A World Trade Organization (WTO) compliance panel last week issued a confidential “interim” decision to parties in the complaint that Canada and Mexico brought against the U.S. Country-of-Origin Labeling (COOL) rules.
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“We have received the interim report, but detailed review is necessary before commenting further,” an official with the U.S. Department of Agriculture (USDA) recently told a reporter from Politico

Speaking in Calgary on Tuesday, Agriculture Minister Gerry Ritz seemed more confident about the eventual outcome of the panel’s decision.  “We’re buoyed by what they have said to our adjudication saying we have actually proven our case so we’ll wait and see what the final ruling looks like, ” he said.  

The chair of the WTO panel has previously indicated that a final report could be expected toward the end of July. The interim report gives the three parties one last chance to comment before the decision is made public.

In response to the WTO’s earlier finding that the Obama Administration’s COOL rules discriminated against foreign livestock, the USDA issued a revised version of the rules in May 2013. However, rather than doing away with the labeling requirement, the new rules demand even more information be included, such as the locations where each production step occurred. Should the WTO once again find that the USDA’s labelling requirements constitute an unfair trade practice, it could lead to punitive tariffs on a multitude of American farm goods and other products exported to Canada and Mexico.

A group of 62 trade associations, food manufacturers and other organizations have asked the U.S. Congress to order a suspension of USDA’s COOL rule if the WTO determines it constitutes an unfair trade practice and authorizes Canada and Mexico “to subject an array of U.S. exports to retaliatory tariffs.”

“We respectfully submit that it would be intolerable for the United States to maintain, even briefly, a rule that has been deemed non-compliant by the WTO. … we request that Congress authorize and direct the Secretary of Agriculture to suspend indefinitely the revised COOL rule for muscle cuts of meat upon a final adjudication of non-compliance with WTO obligations,” the organizations stated.