Trade Compliance

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WTO Rules Against U.S. Over COOL

Posted October 20, 2014

As had been widely expected, the World Trade Organization (WTO) today confirmed that Canada has won another important trade victory in the long-running battle with the U.S. government over controversial meat labelling regulations that have caused significant economic harm to the cross-border beef and pork industries.
Canadian Cow
The U.S. Department of Agriculture amended its country-of-origin meat-labeling (COOL) rule after a WTO finding in 2012 that an earlier version was discriminatory. Canada and Mexico said the amended rule was even more onerous, further limiting their exports of cattle and hogs into the U.S. and negatively affecting the price of those products.

The World Trade Organization’s (WTO’s) decision finds that the U.S. COOL regulations violate global trade rules that require imports to be treated no less favorably than domestic products.

The panel agreed with Canada and Mexico that changes the U.S. made to the rules last year actually made the policy even more detrimental to livestock exporters. “The compliance panel concluded that the amended COOL measure increases the original COOL measure’s detrimental impact on the competitive opportunities of imported livestock in the U.S. market,” the panel said.  “It necessitates increased segregation of meat and livestock in the U.S. market, entails a higher record-keeping burden and increases the original COOL measure’s incentive to choose domestic over imported livestock. ”

Canadian Trade Minister Ed Fast and Agriculture Minister Gerry Ritz welcomed the decision, issuing a joint statement.  “Today’s WTO compliance panel’s report re-affirms Canada’s long-standing view that the revised U.S. COOL measure is blatantly protectionist and fails to comply with the WTO’s original ruling against it,” they said.

“Canada will be watching this situation closely to ensure U.S. compliance in accordance with the WTO’s clear ruling,” the statement says, renewing the threat of retaliation with punitive tariffs on a range of U.S. imports. “We will continue to fully assert our rights to achieve a fair resolution to our concern, including seeking authorization to implement retaliatory measures on U.S. agricultural and non-agricultural products if and as necessary.”

The U.S. government is believed to be considering an appeal of the decision, but a statement by a spokesman for the U.S. Trade Representative simply said:  “We are disappointed that the compliance panels have found that the country of origin labeling requirement for beef and pork continue to discriminate against Canadian and Mexican livestock exports.”

Click here to access the WTO panel’s complete 206-page report.