WTO to Rule on Legality of U.S. Country of Origin Labeling Requirements for Food Products

November 24, 2009

Last week, the World Trade Organization agreed to decide whether U.S. country-of-origin labeling (COOL) requirements violate global trade rules and distort agricultural trade, as alleged by Canada and Mexico.

On March 16, 2009, the U.S. began requiring food processors to identify the country of origin of muscle cuts and ground beef (including veal), pork, lamb, goat, and chicken; wild and farm-raised fish and shellfish; fresh and frozen fruits and vegetables; peanuts; pecans; macadamia nuts and ginseng, at the point of retail.

According to many Canadian and Mexican officials, U.S. COOL has led U.S. processors to stop purchasing their countries’ beef and pork products.   By one estimate, from the Canadian Cattleman’s Association, the U.S. policy has resulted in over $250 million in lost sales for Canadian cattle producers.

Both Canada and Mexico allege that the COOL measures are inconsistent with U.S. commitments under the General Agreement on Tariffs and Trade 1994 (GATT), the Agreement on Technical Barriers to Trade, the Agreement on the Application of Sanitary and Phytosanitary Measures, and the Agreement on Rules of Origin. Canada and Mexico further allege that the mandatory COOL requirements nullify or impair the benefits accruing to them under those Agreements and in the sense of Article XXIII:1(b) of the GATT.