Once Again, WTO Rejects Country of Origin Meat Labels

May 19, 2015

Meat sold in the U.S. has to have a label telling in which country the animal was born, raised, and slaughtered. But the World Trade Organization confirmed Monday that those country of origin labels (COOL) on meat sold in the U.S. violate international law.

The labels were first promoted in the 2002 Farm Bill. The most recent version of COOL labels came out in 2013. (If you need a primer on “country of origin labeling,” watch this video from Harvest Public Media for background.)

The United States was appealing a ruling handed down in October in which the WTO also sided with Mexico and Canada and rejected the labels.

Mexico and Canada have fought COOL from the beginning. They claim that country of origin labels put their cattle producers at a competitive disadvantage.

That claim has to do with the logistics meatpacking companies instituted to comply with the labeling rules. To keep their labels straight, packers started keeping animals and meat from different countries separate throughout the production process. They slaughter, store, and ship them all separately, which they say adds to the cost of doing business.

Canadian and Mexican producers claim, and the WTO agrees, those logistical changes brought on by COOL also made it harder for them to gain access to the U.S. market.

Many meat producers, cattle ranchers in particular, support COOL because they say the labels help their American-raised meat stand out in an increasingly global market.

R-CALF USA CEO Bill Bullard says he is concerned that, without labels, American ranchers could face more competition from cheap, imported beef from not only Canada and Mexico, but also Australia, Brazil, and Argentina.

"This could cause the demise of the independent, commercial U.S. cattle producer, just as it has already devastated the independent, U.S. commercial sheep producer," Bullard said in a statement following the WTO decision.

Bullard called on Congress to leave the COOL law standing.

One COOL supporter in Congress is Iowa Sen. Chuck Grassley. But the Republican says he accepts that the current labeling rules will have to change.

"I think it’s only realistic that when you support the rules of international trade, and the enforcement mechanism, and you want other countries to respect them, then I have to respect them," Grassley said.

The North American Meat Institute, representing the packing industry, applauded the WTO ruling saying “it is clear that repealing the statute is the best step forward.”

So what are the options moving forward from here?

Agriculture Secretary, Tom Vilsack, has made it clear the Department of Agriculture has exhausted its options on COOL and the ball is now in Congress’ court. Here’s what lawmakers could do:

  • Repeal the law. This option already has traction. House Ag Committee chairman, Mike Conaway (R-TX), is preparing to announce a bi-partisan proposal to repeal country of origin labels on meat. It’s not clear how much support that would have in the Senate, however.
  • Stand by the rule as is. Canada and Mexico are trying to make this politically unpalatable by threatening trade sanctions against numerous crops and goods exported from the U.S. to Canada. However, there are some limits to how severe the sanctions could be. WTO rules would restrict Canada’s retaliation to an amount equal to the damage they are claiming from the U.S., around $3 billion.
  • Redesign COOL labels. But how? The Department of Agriculture tried to redesign the labels according to a previous round of trade disputes at the WTO. It didn’t seem to help.

Grassley says a pan-North American label might be acceptable, or a voluntary "made in USA" type label, which he says could mimic a similar program Canada currently has. 

The debate over COOL could inform the current debate over free trade. While some farm groups look forward to new trade opportunities opening up, opponents of the Trans-Pacific Partnership are pointing to the COOL ruling as an example that such agreements can contradict American policy.

“Repeatedly we have in fact changed our consumer and environmental protections to conform to the terms of binding trade pacts,” said Ben Beachy of the consumer-rights advocacy group, Public Citizen.

In a peculiar twist, the European Union is planning on expanding its own country of origin labeling regime just as the United States’ program is twisting in the wind.