[author: Enrique Molina]

The most recent chapter in the dispute over U.S. country-of-origin labeling (COOL) requirements for meat products resulted in a loss for the United States. In a May 18 report, the World Trade Organization's (WTO) Appellate Body upheld all major findings by a WTO compliance panel in October of 2014 regarding the consistency of U.S. COOL requirements with WTO rules.

COOL requirements call for meat packaging in the United States to disclose the countries in which animals used in meat products are born, raised, and slaughtered. In their initial complaint, Canada and Mexico challenged the provisions of the Agricultural Marketing Act of 1946 regarding country-of-origin labeling, as well as their implementing regulations. They argued that COOL requirements did not apply even-handedly to domestic and foreign producers, and thus they placed non-U.S. ranchers and farmers at a competitive disadvantage. Agreeing with their position, the WTO Appellate Body found COOL requirements to be inconsistent with Article 2.1 of the WTO Agreement on Technical Barriers to Trade (TBT). Accordingly, in May 2013, the Department of Agriculture amended its regulations regarding country-of-origin labeling. However, in October 2014, a WTO compliance panel found that the amended COOL regulations were even more detrimental than the original regulations, and thus the United States had not complied with the recommendations and rulings of the Dispute Settlement Body. The compliance panel's findings were upheld by the Appellate Body on May 18, and the Dispute Settlement Body adopted the Appellate Body's report on May 29.

COOL requirements were originally drafted in support of U.S. farmers and ranchers who compete with producers outside the United States. Recently, however, many U.S. meat producers have advocated for repeal, claiming that COOL requirements are burdensome and impose high costs on producers and retailers. On the other side of the issue, some meat producers and consumer advocates oppose repeal of COOL requirements, arguing that consumers have a right to know where their food comes from.

Given the United States' failure to comply with the Appellate Body's findings, Canada and Mexico have sought permission from the WTO to impose retaliatory measures on U.S. agricultural and non-agricultural products. To that end, both countries requested a special meeting of the Dispute Settlement Body on June 17 for the WTO to consider their requests. Canada alleges nullification of benefits amounting to approximately $2.4 billion per year, while Mexico claims nullification of benefits in the amount of $713 million per year. Canada has already published a list of products that may be targeted through retaliatory measures against U.S. exports. Although it is subject to change, Canada's list includes goods such as live swine, frozen orange juice, and jewelry. Mexico has not published an official list, but the director of the trade and NAFTA office at the Mexican Embassy suggested that it might resemble the list of products from the 2009 trucking dispute between the United States and Mexico. Mexico's 2009 list included grapes, Christmas trees, and pork products. The United States disagreed with the level of retaliation requested by Canada and called for arbitration. Because of an error in its initial submission, Mexico has submitted a revised request for retaliation. The United States is likely to call for arbitration with regard to Mexico's request for retaliation, as well. In light of likely retaliation by Canada and Mexico, a failure by the U.S. Congress to repeal COOL requirements would be detrimental to U.S. manufacturers and other exporters in the targeted industries.

In response to the Dispute Settlement Body's adoption of the Appellate Body's report on May 29, the United States House of Representatives voted 300-131 to repeal COOL requirements for beef, pork, and poultry by amending the Agricultural Marketing Act of 1946. The Senate Agriculture Committee held a hearing on COOL requirements on June 25. Although the majority of those in attendance supported the repeal of COOL requirements, there is not unanimity on the issue. Senate Agriculture Committee Chairman Pat Roberts (R-KS) claims that repeal "remains the surest way to protect the American economy." Senate Agriculture Committee ranking member Debbie Stabenow (D-MI) has proposed legislation to replace COOL requirements with a voluntary meat labeling program, in contrast to the approach taken by the House of Representatives of simply repealing COOL without replacing it. There is currently no action scheduled in the Senate with regard to a repeal bill, but it is possible that the Senate will act following its return from the Fourth of July recess.