On October 20, 2014, the World Trade Organization (“WTO”) ruled for the third time that the United States’ country-of-labelling rules (“COOL”) contravenes trade laws by discriminating against beef and pork exports from Canada and Mexico.
The U.S. COOL rules, which first went into effect in 2008 and were amended most recently in 2013, require suppliers to inform consumers at the retail level as to the country of origin of certain commodities, including beef and pork. Specifically, the most recent iteration of COOL requires that all imported packaged beef and pork identify where the animal was born, raised and slaughtered. This identification is costly and administratively burdensome, incentivizing suppliers to source exclusively domestic livestock from the United States, and thereby treating Canadian and Mexican livestock less favourably than the domestic, American commodities.
The WTO’s Appellate Body upheld a previous 2011 Panel Report that this unfavourable treatment of imported livestock is inconsistent with trade laws. The decision has been greeted favourably by members of the Canadian agricultural community, alongside both provincial and federal government officials. The Honourable Gerry Ritz, Minister of Agriculture and Agri-food, and the Honourable Ed Fast, Minister of International Trade, said in an official 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. The WTO’s clear and consistent findings in support of Canada’s position effectively supply a clear message to the U.S.: End this protectionist policy that creates economic harm on both sides of the border and comply with your international trade obligations.”
Despite the fact that this is the third ruling the WTO has made against the United States’ meat-labelling laws in five years, the U.S. is appealing this most recent decision. Minister Ritz has said that Canada may impose regulatory tariffs on some U.S. goods, such as cheese, apples, corn, chocolate, pasta, frozen orange juice, wine, spirits or others, as early next year, if Washington does not comply with the WTO ruling.