The mystery behind the World Trade Organization’s (WTO) final decision regarding country of origin labeling (COOL) will hopefully be finalized by the end of the month, but coalition members asking for an indefinite suspension of the revised COOL rule believe the public announcement on the final decision probably won’t be seen until September.
“At that point and time we will know exactly what the WTO has ruled,” said Colin Woodall, National Cattlemen’s Beef Association (NCBA) Vice President of Government Affairs.
On June 27, WTO delivered the preliminary and confidential decision to the three governments, U.S., Canada and Mexico, for review and the speculation has continued to grow. Rumors that WTO ruled against COOL on two counts could not be confirmed.
Jim Robb with the Livestock Marketing Information Center said, “Some mixed signals in the WTO decision would be expected based on past experience regarding COOL and other WTO agriculture-related decisions.”
In an effort to prevent what they say will amount to billions of dollars in retaliatory tariffs against the U.S., a broad coalition of industries sent a letter to the leaders of the House and Senate Agriculture Committees asking Congress to take action directing the Secretary of Agriculture to suspend indefinitely the revised COOL rule if it is found to be in violation of U.S. international trade obligations.
The COOL Reform Coalition includes not only NCBA, but also the Snack Food Association and brand name corporations such as Nestle USA, PepsiCo, and Tyson Foods.
“We respectfully submit that it would be intolerable for the United States to maintain, even briefly, a rule that has been deemed noncompliant by the WTO,” the letter, sent to the top-ranking members of the House and Senate agriculture committees, states. “With little potential for quick congressional action after a WTO final adjudication, we request that Congress authorize and direct the Secretary of Agriculture to suspend indefinitely the revised COOL rule for muscle cuts of meat upon a final adjudication of noncompliance with WTO obligations.”
Canada and Mexico challenged the revised COOL rule for muscle cuts of meat in the WTO shortly after the USDA issued the revised rule, arguing that COOL has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market, thus violating the WTO Technical Barriers to Trade Agreement.
“Together Canada, Mexico and the United States make up one of the most competitive and successful regional economic platforms in the world,” said Jodi Bond, Vice President for the Americas at the U.S. Chamber of Commerce. “The disruption of that partnership by WTO noncompliance would have a devastating economic impact on industries including food production, agriculture and manufacturing.”
Canada and Mexico have indicated they will seek to retaliate against the U.S. if it is found noncompliant.
“If Congress fails to ensure that U.S. COOL requirements comply with our international obligations, U.S. jobs and manufacturing will be put at risk,” said Linda Dempsey, Vice President of International Economic Affairs at the National Association of Manufacturers. “The United States helped create the WTO to ensure that all countries play by the rules;
U.S. leadership in complying with our own obligations is critical to the United States’ ability to address effectively unfair and WTO-violative trade barriers by our trading partners around the world.”
The WTO in November, 2011 ruled against a previous version of the COOL rule, finding that it treated imported livestock less favorably than U.S. livestock (particularly in the labeling of beef and pork muscle cuts), and did not meet its objective to provide complete information to consumers on the origin of meat products. The international trade body gave the U.S. until May 23, 2013, to bring the rule into WTO compliance. It is that revised rule on which the WTO will decide and that the coalition is seeking to suspend.
Canada released a list of products they would seek retaliatory tariffs against, tariffs that would harm all members of the coalition and create severe economic hardship to the U.S. economy.
Canada’s list of possible commodities included live cattle, hogs and meat products in addition to fruits, grains, pasta, bread and wine, along with a variety of other agrelated products. While the Mexican government has not released a commodity list, Woodall says retaliation from the country is still expected.
“Retaliation could come in several different forms,” he said. In the past, Mexico has done “everything from adding tariffs onto products to shutting down the border.”
While the WTO is busy wrapping up its decision, a lawsuit filed in California challenging COOL labeling has Trader Joe’s on the defense.
A lawsuit was filed in the County of Los Angeles Superior Court by Made in the USA Foundation Chairman Joel Joseph claims the company’s “country-of-origin” labeling is misleading and confusing.
According to reports, Joseph filed the lawsuit after shopping at a Trader Joe’s location and seeing products improperly and incorrectly labeled with multiple country of origin designations on products including spinach, lettuce, ground beef and ribeye steaks that are not compliant with USDA’s current COOL regulations.
“Many of these products were labeled ‘Product of USA and Mexico,’ some meat products are labeled ‘Product of Australia, USA, Nicaragua and New Zealand,’ and similar labels that are inaccurate, misleading and not in compliance with California and federal law,” the complaint states.
“I helped draft, lobby and achieve the passage of the federal Country-of-Origin- Labeling Act,” Joseph said. “The entire purpose of the [COOL] act is that no commingling would be allowed so that consumers could choose American food over foreign if they so desired.
This consumer-based lawsuit could add a new twist to COOL regulations, depending on WTO’s final decision. — Traci Eatherton, WLJ Editor