A U.S. law that requires labelling of certain foods by country of origin, and adds hassles for U.S. processors who import meat or livestock from Canada, has again been ruled out of bounds by a world trade body, this time on appeal.
The Appellate Body of the World Trade Organization (WTO) on Friday upheld the ruling by a panel of the WTO's Dispute Settlement Body (DSB), which in November last year found that the U.S. government's mandatory country-of-origin labelling (COOL) law violates parts of the WTO's Agreement on Technical Barriers to Trade (TBT).
The U.S. government in March filed an appeal, seeking to overturn the DSB's ruling that COOL violates Washington's WTO obligations and "does not fulfil its legitimate objective" of consumer education.
However, the Appellate Body has upheld the DSB's finding that COOL "has a detrimental impact on imported livestock."
COOL's recordkeeping and verification requirements "create an incentive for processors to use exclusively domestic livestock, and a disincentive against using like imported livestock," the Appellate Body said.
The Appellate Body went further, however, and ruled COOL "lacks even-handedness" by imposing "a disproportionate burden on upstream producers and processors of livestock, as compared to the information conveyed to consumers through the mandatory labelling requirements for meat sold at the retail level."
COOL, the Appellate Body said, requires a "large amount of information must be tracked and transmitted by upstream producers for purposes of providing consumers with information on origin" but "only a small amount of this information is actually communicated to consumers in an understandable or accurate manner."
On top of that, the Appellate Body ruled, "a considerable proportion of meat sold in the United States is not subject to the COOL measure's labelling requirements at all."
COOL's impact on imported livestock thus "cannot be said to stem exclusively from a legitimate regulatory distinction" and instead amounts to discrimination against Canadian products, violating the TBT agreement.
The Appellate Body's decision is the latest step in Canada's 2008 challenge of COOL at the WTO.
COOL was conceived in Washington's 2002 Farm Bill and launched in September 2008. It orders U.S. retailers to notify their customers, by way of labeling, on the sources of foods such as beef, veal, pork, lamb, goat, fish, fruits, vegetables, peanuts, pecans and macadamia nuts.
Canada's Agriculture Minister Gerry Ritz has scheduled a press conference for later this morning at a farm at Dundurn, Sask., about 35 km south of Saskatoon, with representatives from Canada's cattle, hog and meat processing industry groups, to discuss the Appellate Body's decision.
MORE TO COME.