July 7, 2014
WTO to rule on US Country of Origin Labelling law
The World Trade Organisation will rule on USDA's Country of Origin Labelling law, which has started a political fight between the US and its neighbours Canada and Mexico, reported The Wichita Eagle.
If the WTO rules against the US, Canada and Mexico will likely retaliate by levying tariffs on a wide variety of US goods. Any retaliation would take at least six more months to take effect.
The labelling law requires US producers and retailers to tell customers the countries in which livestock were born, raised and slaughtered, and whether the processing of beef and pork are in preferred industry usage. It also bans the co-mingling of beef and pork of different national origins.
Initially introduced in 2009 as part of the farm bill, the rules were deemed as a trade barrier by Mexico and Canada. USDA later responded by rewriting the rules to comply with the WTO, which is now in effect in the US.
However, the rules are not without opponents within the US. The National Corn Growers Association and Tyson Foods argued that the mandate adds costs with little benefit to consumers in return.
According to estimates by the USDA, 2,808 livestock processing and slaughtering companies, 38 chicken processing enterprises and 4,335 retailers are affected by the rules. The agency also estimated that the combined cost of the requirements for the industry to be between US$53.1 million and US$137.8 million.