The World Trade Organization Appellate Body has partially rejected the U.S. Office of the Trade Representative’s (USTR’s) appeal in a dispute with Canada and Mexico over “country of origin” labeling (COOL) for beef and pork products. After WTO’s Dispute Settlement Panel ruled in November 2011 that specific provisions of the U.S. COOL program provided less favorable treatment to Canadian and Mexican livestock, USTR appealed the ruling on the ground that COOL does not impose unfavorable treatment of imported products because it “requires meat derived from both imported and domestic livestock to be labeled under the exact same set of circumstances.” Additional details about the appeal appear in Issue 433 of this Update.
In upholding the Dispute Panel’s assessment, the WTO Appellate Body agreed that “the COOL measure treats imported livestock differently than domestic livestock,” in part because it creates “an incentive in favor of processing exclusively domestic livestock and a disincentive against handling imported livestock.” But the appeals panel also concurred that the United States has the right to enact COOL regulations in general and reversed the initial finding that COOL was “inconsistent” with Article 2.2 of the Technical Barriers to Trade (TBT) Agreement by being more trade-restrictive than necessary. Once the WTO Dispute Settlement Body has adopted these rulings, it will grant “a reasonable period of time” for the United States to comply with the TBT Agreement.
“We are pleased with today’s ruling, which affirmed the United States’ right to adopt labeling requirements that provide information to American consumers about the meat they buy,” said U.S. Trade Representative Ron Kirk in a June 29, 2012, statement. “The Appellate Body’s ruling confirms that families can still receive information on the origin of their meat and other food products when they shop for groceries… We are also pleased that the Appellate Body overturned the initial finding that COOL is more trade restrictive than necessary to provide consumers with valuable information on the food they buy. In doing so, the Appellate Body agreed with the United States and declined to accept any of the alternatives that Canada and Mexico claimed we should have used instead.”