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WTO Says COOL Not Kosher

DC Dialogue

Preliminary ruling finds that mandatory country-of-origin labeling represents a protectionist barrier to trade that distorts competition in the U.S.

Published on: June 3, 2011

In May, reports surfaced that the World Trade Organization (WTO) made a preliminary ruling which had found that the U.S. mandatory country-of-origin labeling (COOL) does indeed act as a trade barrier, as Mexico and Canada challenged.

COOL was first legislated in the 2002 Farm Bill but it wasn’t until the next farm bill debate that anything truly moved forward on the law. In 2008, the U.S. Congress passed the Food, Conservation and Energy Act, which imposed mandatory COOL for beef, lamb, pork, goat meat, wild and farm-raised fish and shellfish, fruits and vegetables, peanuts, pecans, ginseng and macadamia nuts. Canada and Mexico initiated the WTO case six months after the act was passed.

On Friday, May 20, 2011, WTO released its preliminary ruling that determined U.S. COOL requirements violate provisions of WTO’s agreement on Technical Barriers to Trade (TBT). WTO ruled U.S. COOL requirements do not fulfill the stated U.S. objective of helping inform consumers of the origin of meat and, consequently, violate the TBT agreement.

statement from the National Cattlemen’s Beef Association said that the ruling reinforces what the group has said all along. According to NCBA President Bill Donald, COOL was a bad idea from the beginning.

“This ruling is unfortunate for the U.S. government but the consequences of a poor decision have been revealed,” he said.

Donald said there have been no winners with COOL. He said U.S. cattle ranchers lose right along with cattlemen from Mexico and Canada.

“Proponents of COOL have always believed that restricting imports of Mexican and/or Canadian feeder cattle will decrease the supply of feeder cattle in the United States and increase the price of U.S. origin feeder cattle. In reality, reducing the number of cattle in the marketplace also reduces the infrastructure of the U.S. beef industry,” said Donald. “The ultimate result of such an action is that the value of all feeder cattle in Mexico, the United States and Canada are reduced. We all lose. The truth is, in this global economy, a rising tide floats all boats. Shrinking the size and scope of our industry only serves to cripple us for the future.”

R-CALF USA, another cattlemen association, has been a leading advocate of COOL. R-CALF USA COOL Committee Chair Mike Schultz said, “COOL enables consumers to exercise choice in the marketplace by giving shoppers the information they need to choose from which country they want their food produced.”

R-CALF USA CEO Bill Bullard said it is wrong for the WTO to tell the American people what it can and cannot do.  “U.S. citizens exercised their constitutional right to self-governance by urging Congress to pass a law that informs them of where their food is produced. Now we have an un-elected, foreign tribunal that is attempting to strike down our constitutionally passed law,” Bullard said.  

“There can be no clearer evidence than this that Congress’ acquiescence to these international tribunals threatens our nation’s core sovereignty,” he added. “If U.S. citizens no longer have the right to have a label on their food that informs them of where their food came from, then our sovereign rights as citizens of this Great Nation have already been eroded.”

WTO will reportedly make the ruling public sometime in September. The United States will then have two months to decide whether to appeal the ruling. 

What do you think – should COOL be allowed to continue or should the law be taken off the books to meet WTO commitments?