July 2, 2012
US losses appeal on WTO's meat labelling rule
The bulk of its appeal against a World Trade Organisation (WTO) ruling on meat labelling had been lost Friday (June 29) by the US, meaning it may have to stop requiring retailers to display the country of origin on the meat they sell.
The WTO Appellate Body said the US country-of-origin labelling rules, commonly known as COOL, were wrong because they gave less favourable treatment to beef and pork imported from Mexico and Canada, the countries that brought the case, than to US meat.
The decision gives the US time to comply and does not immediately alter the labelling rules, but is not subject to further appeal. The meat labels became mandatory in March 2009 after years of debate. US consumer and some farm groups supported the requirement, saying consumers should have information to distinguish between US and foreign products.
Big meat processors opposed the provision, which they said would unnecessarily boost costs and disrupt trade. A WTO panel ruled in November that the labelling provision violated WTO rules on technical barriers to trade.
"Country of origin labelling is a lose-lose proposition for all players on both sides of the (border)," said Canadian Agriculture Minister Gerry Ritz, adding that within one year of the law, Canadian feeder cattle exports to the US plunged by nearly half.
"Today's ruling is a key victory for the livestock industry," he said.
The US labelling law requires grocers to put labels on cuts of beef, pork, lamb, chicken and ground meat or post signs that list the origin of the meat. The WTO appeal body upheld an earlier WTO finding that COOL violates trade rules by giving less favourable treatment to imported cattle and hogs than domestic livestock.
It reversed an earlier finding that COOL fails to fulfil its goal of providing consumers with information on origin. The US highlighted that decision in its response.
"We are pleased with today's ruling, which affirmed the US' right to adopt labelling requirements that provide information to American consumers about the meat they buy," said US Trade Representative Ron Kirk in a statement on his blog. "The Appellate Body's ruling confirms that families can still receive information on the origin of their meat and other food products when they shop for groceries."
US officials said the ruling allows the US to continue to require country-of-origin labels, but it has to change how it runs the programme to ensure it is not a technical barrier to trade.
To be listed as US origin, meat must come from animals born, raised and slaughtered in the US. Meat from livestock raised in Mexico or Canada for slaughter in the US must be labelled as a product of mixed origin. Canada and Mexico have sizeable cattle and hog trade with the US.
The countries have until early September to agree on a reasonable amount of time for the US to comply - which could be up to 15 months, said John Masswohl, director of government and international relations for the Canadian Cattlemen's Association.
The Canadian industry is seeking legislative changes that could include making the labelling rule voluntary, or labelling livestock according to where they are slaughtered or processed, he said.
"The World Trade Organisation has been extremely clear that mandatory Country of Origin Labelling is a clear WTO violation," said Bob McCan, vice president of the US-based National Cattlemen's Beef Association. "This (appeal) did nothing more than jeopardise our strong trade relationship with Canada and Mexico, the two largest importers of US beef."
But Public Citizen, a Washington-based non-profit organisation, said the decision will mean consumers have less access to information about the origin of their food, and health regulators may struggle to track food-borne bacteria.
"The WTO announcing that big agribusiness corporations must be allowed to sell mystery meat here, despite US consumers and Congress demanding these labels, is yet another example of outsourcing our legal system to international commercial bodies that push corporate interests," said Lori Wallach of Public Citizen.
Many US meat-packing plants, especially those near the US-Canada border, either stopped accepting Canadian livestock or bought less due to the increased costs of segregating animals by domestic and foreign origin.
Changing the law would most affect packing plants that were once big buyers of Canadian animals, including those owned by JBS, Tyson Foods, Cargill Inc., Hormel Foods and Smithfield Foods, Canadian farm industry officials have said.