Country-of-Origin-Labelling, or COOL for short, may lead to a trade showdown with Canada and Mexico on one side and the United States on the other with Canadian agricultural producers caught in the middle.

In 2003, the US Department of Agriculture (USDA) proposed mandatory labelling rules for a host of products sold in the United States, from muscle cut to ground meats, from farm-raised fish to pecans. The proposed labels would provide a range of information to consumers including locale listings for birthing, raising and processing.

At the time, the main reason cited in favour of COOL was consumers’ demand to know the origins of the food they were buying off the grocery store shelves. However American producer groups, such as the American Meat Institute (AMI), which represents US red meat and turkey processors, immediately opposed the labelling, pointing to the substantial costs American producers and processors would incur for additional record-keeping, tracking and labelling.

In 2009 the USDA responded with a simplified rule that would require a basic label, stating, for example: “Product of the U.S.” or, where a product such as ground meat comes from two countries: “Product of the U.S. and Mexico”.

In the meantime, the Canadian and Mexican governments, viewing COOL as an infringement of the United States’ WTO obligations, initiated a complaint against the practice in 2008. A WTO Panel ruled in favour of Canada and Mexico; a decision which was subsequently upheld by the WTO Appellate Body in June 2012.

In March of this year, the USDA responded with new labelling rules, but according to the AMI, the latest revisions make matters worse. The updated rules would drop the phrase “Product of….” returning to something like the 2003 proposals. In the case of meat, the labels would once again state where an animal was born, raised and slaughtered, all of which could occur in different countries.

On April 10, 2013, the AMI pointed out in its recent media release on the topic that the latest version of the rules will be even more expensive than 2009 proposals as these will require stricter segregation of products and even more record-keeping. In addition, AMI refers to numerous studies showing that country-of-origin-labelling was never a priority for consumers in the first place.

The Canadian government’s response to the new proposals was to send federal Agriculture Minister Gerry Ritz to meet with USDA Secretary Tom Vilsack in April 2013 to make the case that the latest version of COOL continues to put the United States offside the WTO rulings which specifically found that the record-keeping and verification processes imposed by the U.S. necessitate segregation and thereby have a detrimental impact on foreign products.

The United States has until May 23 to comply with the WTO rulings. Minister Ritz has warned that failure by the US to comply will result in Canada considering “all options including retaliatory measures…as mandated by the World Trade Organization.”

- Collin May