On June 29, the WTO Appellate Body circulated its report in United States - Certain Country of Origin Labelling (COOL) Requirements. Although the Appellate Body upheld the Panel’s decision that the COOL requirements are inconsistent with Article 2.1 of the Agreement on Technical Barriers To Trade (“TBT”) Agreement, it did so on different grounds.

The Appellate Body found that the COOL requirements accord less favorable treatment to imported livestock than to like domestic livestock due to its recordkeeping and verification requirements. The Appellate Body reversed the Panel’s decision with respect to Article 2.2 of the TBT Agreement. The Appellate Body agreed with the Panel that the provision of consumer information on origin is a “legitimate objective.” However, the Appellate Body found that the Panel erred in stating that the COOL requirements do not fulfill their stated objective because they fail to convey “meaningful origin information to consumers.” The Appellate Body ultimately determined that the record before it contained insufficient information to complete the legal analysis under Article 2.2, and therefore made no conclusive finding as to whether the COOL requirements are more trade restrictive than necessary to fulfill its legitimate objective. The next step in the case is for the WTO Dispute Settlement Body to adopt the Appellate Body’s recommendations and rulings. As part of its markup of the 2012 Farm Bill, the House Committee on Agriculture included an amendment setting a 90-day limit for the USDA to report to Congress how it will ensure that the United States complies with the WTO ruling.

For additional information on the COOL requirements and the November 2011 ruling of the WTO Dispute Settlement Panel ruling, see the January 2012 and April 2012 editions of the Trade and Manufacturing Alert.