A federal court in the District of Columbia will consider on August 27, 2013, whether to issue a preliminary injunction to stop the U.S. Department of Agriculture (USDA) from implementing country-of-origin labeling (COOL) program changes required by a 2011 World Trade Organization (WTO) determination that, as initially drafted, the rules gave less favorable treatment to cattle and hogs imported from Canada and Mexico. Am. Meat Inst. v. USDA, No. 13-1033 (filed July 8, 2013). Information about the revised COOL rule appears in Issue 485 of this Update.

A number of meat-processing interests, including the American Meat Institute, Canadian Cattlemen’s Association, Confederación Nacional de Organizaciones Ganaderas, National Cattlemen’s Beef Association, and National Pork Producers Council, challenged the new rule alleging that it violates First Amendment rights under the U.S. Constitution, exceeds USDA’s authority and violated the Administrative Procedure Act.

In early August, the U.S. Cattlemen’s Association (USCA), National Farmers Union, American Sheep Industry Association, and Consumer Federation of America sought to intervene in the lawsuit, and the court granted that motion. These opposition ranching and consumer interests contend that if the court enjoins the rule’s enforcement, the United States will once again be deemed in violation of WTO requirements. They also claim that the plaintiffs’ alleged economic harms are overstated and based on uncertain assumptions about future market behavior.

Meanwhile, Canada has asked WTO to establish a compliance panel to re-examine the U.S. COOL program, as amended, claiming that the amendments were inadequate and would make matters worse. In a joint statement, Canada’s Minister of International Trade Ed Fast and Minister of Agriculture and Agri-Food Gerry Ritz said, “We had hoped to avoid having to again resort to the WTO to resolve this matter. However, despite consistent rulings by WTO, the U.S. government continues its unfair trade practices, which are severely damaging to Canadian industry and jobs. We believe that the recent amendments to the COOL measure will further hinder the ability of Canadian cattle and hog producers to freely compete in the U.S. market.”

Explaining the Canadian initiative to its members, USCA South Dakota Director and COOL Committee Chair Danni Beer noted that once the WTO compliance panel is established, arguments and briefings will be brought before it. “If the compliance panel’s findings are not satisfactory to either side in the dispute, the decision can be appealed to the WTO Appellate Body. Canada’s request for a compliance panel is the first step in this process. If the U.S. is found to be in compliance, then Canada has no right to retaliation, which must be authorized by the WTO. If the U.S. is found not to be in compliance, then Canada can pursue retaliation, but a specific amount of retaliation must be requested and is subject to arbitration.”

Beer also observed that this compliance panel request is separate from the litigation pending in Washington, D.C., in which it intervened. He claimed, “The defense of COOL has unified producers across this country who believe that a successful, viable future for the U.S. cattle industry means maintaining the identity of the U.S. cattle herd and differentiating U.S. beef from foreign beef.” See USCA Press Releases, August 9, 20 and 21, 2013; Canadian Ministers Fast and Ritz Statement, August 19, 2013.