U.S. District Court Rules that Country of Origin Labeling Statute can exist with NAFTA Marking Rules

February 13, 2010

On February 5, 2010 the U.S. District Court for the Eastern District of Washington found that the U.S. country of origin labeling law (COOL) can coexist with preexisting NAFTA marking rules.  The ruling is being viewed as blow to Canada and Mexico’s WTO challenge over the new COOL requirements, which took effect on March 16, 2009.

The lawsuit, filed by Easterday Ranches, claimed that the marking rules established by the U.S. Department of Treasury to implement NAFTA provide that beef derived from the slaughter of imported cattle is entitled to be designated as a “product of the USA.” Easterday further argued that as a result of these preexisting marking rules (NAFTA rules), the COOL law improperly requires beef from such cattle to be labeled as a product from both countries.

The District Court however, disagreed. It determined that the existing NAFTA marking rules are for purposes of tariff designation in a customs setting only, while the COOL law applies to retail products. Therefore, the COOL statute does not present an irreconcilable difference with the NAFTA rul