WTO Rejects U.S. Appeal in COOL Dispute

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.”