Washington, D.C.—Today, the World Trade Organization (WTO) ruled that mandatory country of origin labels (COOL) rules for meat and poultry that went into effect in the United States in 2013 are not compliant with global trade standards. The WTO continued to find that the goal of providing information to consumers was compliant with international trade rules, but it decided narrowly that the implementation of the rules for COOL labels negatively impacted livestock imports from Canada and Mexico.
“This is just the latest example of how multinational companies use the global trade system to attack basic protections for U.S. consumers,” said Food & Water Watch Executive Director Wenonah Hauter. “The meat industry has been trying – and failing – for years to get rid of COOL through the U.S. system, so it had to use unaccountable, unelected trade officials at the WTO to do its dirty work.”
The case also highlights how international trade deals can trump the will of the American public and Congress. The Obama administration is currently pushing two new trade deals with the European Union and eleven Pacific Rim nations and has repeatedly said that these new deals won’t overturn U.S. laws. While the deals themselves may not wipe out U.S. laws, they do establish trade tribunals that can be used to do so.
“The COOL case proves that trade agreements can and do trump U.S. laws,” said Hauter. “This is a chilling reminder that our very democracy is at stake in these trade deals. Congress should reject calls to Fast Track new trade deals to maintain its legislative autonomy, rather than creating new trade tribunals that can wipe out U.S. laws.”
COOL labels were included in the 2002, 2008 and 2014 Farm Bills due to overwhelming consumer and farmer support. COOL is required for unprocessed beef, pork, poultry, lamb, goat, venison, fresh and frozen fruits and vegetables, some nuts and seafood. Canada and Mexico challenged the U.S. rules for COOL at the WTO in 2008 before the first label was ever applied to a steak or pork chop.
Canada and Mexico prevailed in the original WTO dispute and the USDA updated the COOL rules in 2013 to address the decision by eliminating the misleading ‘mixed origin’ country of origin label for meat, ensuring that each cut of meat displays each stage of production (where the animal was born, raised and slaughtered) on the label. This sensible approach improved the utility of the information consumers receive from the label and allows livestock producers to distinguish their products in the marketplace. Nonetheless, Canada and Mexico demanded that the WTO reject the new COOL rules.
“People have the right to know where the food they feed their families comes from. It is nonsensical that a label that lets consumers know the origin of their food would be considered a trade barrier,” said Hauter. “President Obama must stand up to the WTO and maintain the existing requirements for country of origin labeling.”
Because the U.S. did not prevail in this case, the WTO will next determine the appropriate level of tariff retaliation that Canada and Mexico might apply. For the past two years, Canada has suggested that the WTO was certain to award billions of dollars tariff penalties in the case, but the WTO has not yet approved any level of retaliation.
Canada and Mexico have asserted that their exports declined after 2008 entirely because of the application of a COOL label. But the economic recession was the driving factor behind the decline in livestock imports, not COOL. A 2015 study by Auburn University Professor C. Robert Taylor found that COOL had no impact on imports of cattle from Canada and Mexico. Currently, even with COOL in place, cattle and hog imports from Canada and Mexico are at higher levels than before COOL took effect.
Some in Congress are now pushing to repeal COOL in advance of any WTO determination of tariff penalties, which could be negligible since COOL did not cause the change in market access.
“It is absurd to think that a label had more of an impact on cattle imports than the Great Recession,” said Hauter. “The Congress should not unilaterally surrender because of Canada’s bluster. COOL had negligible impacts on imports, and the tariff penalties, if any, will likely be small.”
Contact: Kate Fried, Food & Water Watch, (202) 683-4905, kfried(at)fwwatch(dot)org.