WTO finds Country of Origin Labelling disadvantageous to Canada, Mexico
October 31, 2014
A Swiss researcher, the Pakistani ambassador and a former World Trade Organization employee turned consultant convene to talk about U.S. meat labeling laws.
No, it is not another bad joke, with a lame punchline, it is the panel created by the WTO who jointly pulled a trigger this week that sent the shot that was heard nearly around the world.
According to R-CALF USA, those three individuals comprise the WTO panel that completed a 206-page report outlining their arrival at a much-anticipated decision that the U.S. country of origin labeling law puts Canada and Mexico at a disadvantage.
At the heart of the WTO decision is the stated purpose of the WTO itself, on its website, under the "what we stand for" tab, it tells the world: "A country should not discriminate between its trading partners and it should not discriminate between its own and foreign products, services or nationals."
In their overview, the COOL review panel said, "The compliance panel found that the amended COOL measure violates Article 2.1 of the TBT Agreement because it accords to Canadian and Mexican livestock less favourable treatment than that accorded to like US livestock."
U.S. cattlemen and beef groups from across the country responded quickly with a variety of thoughts on the ruling.
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The National Cattlemen's Beef Association, who does not support mandatory country of origin labeling has historically voiced opposition to the law, calling it burdensome and expensive.
Texas cattleman Bob McCan said that their producers have suffered discounts as the result of the law that has been in effect since 2008. "Our producers have….faced the closure of a number of feedlots and packing plants due to the effects of this short-sighted regulation. COOL is a failed program that will soon cost not only the beef industry, but the entire U.S. economy, with no corresponding benefit to consumers or producers."
"NCBA has maintained that there is no regulatory fix to bring the COOL rule into compliance with our WTO obligations or that will satisfy our top trading partners. We look forward to working with Congress to find a permanent solution to this issue, avoiding retaliation against not only beef, but a host of U.S. products," McCan said in a news release. NCBA also included a link to the Canadian government's list of U.S. items they have threatened to impose retaliatory sanctions in, which includes 38 produces like U.S. cattle and hogs, as well as a number of symbolic products, including California wine, Vermont maple syrup, Florida orange juice, ketchup and breakfast cereal, according to Canadian news reports.
But the American Farm Bureau Federation hopes the law can be tweaked to work for everyone. Work on the rule must be done to bring the U.S. COOL regulations into compliance with WTO requirements, said American Farm Bureau Federation president Bob Stallman.
"Farm Bureau will carefully review the decision and then determine further recommended actions. We will work with the Office of the U.S. Trade Representative and USDA to reach the goal of an effective COOL program for meats that conforms to international trade rules," Stallman said in a news release.
The pro-COOL cattlemen's group R-CALF USA disputes the claim that country of origin labeling has cost domestic producers. "The … claim that for six years the COOL law has provided no benefits and has only cost our U.S. cattle industry is absolute baloney," said R-CALF USA CEO Bill Bullard in a news release.
"USDA data clearly show that during the past six years COOL has been in place, the returns per bred cow based on operating costs for U.S. cattle producers have steadily improved each and every year. In fact, in 2013 and 2014, the years when the latest COOL regulations were in place, the returns have been the highest in recent memory, if not in history," Bullard stated.
Both R-CALF and the U.S. Cattlemen's Association urge the U.S. Trade Representative's office to appeal the WTO panel's decision.
Matthew McAlvanah with the U.S. Trade Representative said an appeal is a possibility.
"While the WTO continues to affirm the right of the United States to require country of origin labeling for meat products, we are disappointed that the compliance panels have found that the country of origin labeling requirements for beef and pork continue to discriminate against Canadian and Mexican livestock exports. We are considering all options, including appealing the panels' reports."
"There may still be many months before the WTO process reaches a final result," USCA President Danni Beer, Keldron, S.D. said in a news release.
"We urge the U.S. Trade Representative to consider appealing the ruling if there are meritorious grounds to do so," continued Beer. "In addition, we ask USDA to review the ruling to determine whether additional regulatory changes may permit the U.S. to come into compliance without weakening COOL."
In an Oct. 23 media call, she added that the WTO has not ruled that country of origin labeling is inherently problematic, but that changes might be in order. "The biggest thing we saw as cattle producers was that WTO said 'you can still do this.'" Beer refuted claims by anti-COOL groups who say the expense of segregating cattle and meat is too great. "Packers already sort for over 100 brand names, they sort for breed recognition with brands like Certified Angus Beef, they sort for maturity and quality grades prime, choice, select and standard, and even several levels of choice. These things aren't too costly and we don't think COOL is too costly either."
Beer added that the law was never intended to be protectionist, but simply to provide consumers full information and to allow the free market system to function properly.
"The WTO has only explained that COOL has to be implemented in a way that conveys sufficient origin information to the consumer. USCA strongly supported the revised COOL regulations issued in response to that original WTO decision, and we continue to believe those rules are WTO consistent."
USCA and R-CALF USA urge Congress not to consider repealing the law.
"Congress should not capitulate to the WTO's and the multinational meatpackers' efforts to weaken our COOL law," Bullard said."We must take the time to carefully analyze this ruling and then formulate a strategy for preserving our important, pro-competitive COOL law for U.S. citizens who deserve to know where their food is produced."
On the practical side of implementing COOL, an Omaha, Nebraska- based grocery chain meat market manager said that meat labeling has not been inconvenient.
"The meat hasn't been a problem, we're able to lock it into the computer, and it is downloaded into our tag system," said Jeff Waddingham, meat supervisor for Bag and Save/No Frills, Omaha, Nebraska.
While he said he watches the produce department struggle to ensure that individual items bear a country of origin label, the origin of the meat rarely changes from one delivery to the next and any changes are done within the computer system at the corporate level.
"For me its no different than changing ounces or the description of on item," Waddingham said."It is important when you come down to it especially when you are talking about seafood. It's about food safety these days. There is definitely a need for it."
"You've got to remember the green onions out of Mexico. It's not that the government is forcing this on us, people demanded that the government do this. We had groups out there demanding that this be done," he said.
Patrick Woodall, Research Director, Food & Water Watch, said that the WTO overstated the expense of labeling, using estimates from anti-labeling meatpacking groups. Other comments from the WTO ruling showed the panelists to be out of touch with the industry.
"The report brings in hypothetical and silly examples. They say Canada might be exporting livestock to Mexico, raised there, then imported by the U.S. This is not demonstrated by evidence. In reality, Canada exports less than 20 live cattle per year to Mexico."
While Waddingham said that consumers presently show more concern over the country of origin of seafood than many other kinds of meat, "You've got to look at the whole industry. It is important. Just think if we were getting lamb or goat from Liberia right now I don't think anybody would buy it. It (country of origin labeling) has a purpose."
Waddingham added that he believes labeling is important for consumers and marketers in other countries as well.
"You can't blame them, most countries have never had what Canada and America have had, the luxury of safe food, they've had no sanitation programs no guidelines, unsafe drinking water. They've got a problem and that is why they are importing food from us." ❖