May 27, 2011
The World Trade Organisation has ruled against some US labelling regulations for meat sold in supermarkets, saying they discriminate against foreign suppliers, people close to the case said Thursday (May 26).
The confidential interim ruling, if approved later this year, would deal a partial victory to Mexican and Canadian breeders frustrated in their attempts to export to the US, and opens the way to scores of similar legal challenges, the sources said.
A WTO spokesman said the interim report - expected to be largely unchanged in its final version later this year - was circulated to the US, Canada and Mexico on May 20.
Canada and Mexico sued the US at the WTO in 2009, saying US Country of Origin Labelling (COOL) rules requiring meat sold in US stores to show which country it comes from damaged their North American trade.
More broadly, the case highlights a growing trend toward subtle trade barriers - including standards on health, safety or consumer information - that can hit demand for imports.
The ruling is expected to spur similar cases around the world where exports worth billions of dollars are being slowed by such standards, some of which are designed specifically to galvanise local consumer loyalty.
The US rule obliges suppliers to label certain foods, including beef and pork, according to the country in which they are sourced. A US label is permitted only on meat from animals born, raised and slaughtered in the US.
The biggest US cattle industry group welcomed the decision, saying COOL was a bad idea from the start.
"This ruling is unfortunate for the US government but the consequences of a poor decision have been revealed. We fully support WTO's preliminary ruling," Bill Donald, president of the National Cattlemen's Beef Association, said in a statement.
Donald said US cattle ranchers suffer from COOL along with cattlemen from Mexico and Canada because it reduces the value of North American feeder cattle.
But a rival cattle group warned the decision would hurt US producers by denying consumers the ability to make an informed choice.
"We want consumers to be able to support our US cattle industry by differentiating and selecting US-grown beef from the growing volumes of imported beef sourced from over a dozen foreign countries," Mike Schultz, of the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, said in a statement.
Once a final report is issued later this year, the US will have 60 days to appeal.
"The US remains committed to helping ensure that consumers get the information they need to make informed buying decisions about these products," said Nkenge Harmon, spokeswoman for the US Trade Representative's office.