WTO Issues Preliminary Decision Against MCOOL

On May 27, 2011, in International Trade, by Phouth Gonzalez

U.S. labeling requirements involving the origin of meat, chicken, and certain other products sold at retail grocery are in violation of World Trade Organization (WTO) rules, according to news reporting services who have been advised about a WTO interim report that was circulated to the governments of the United States, Canada, and Mexico late last week.

WTO’s preliminary ruling, which is highly unlikely to be changed when the final ruling is issued in September, states that mandatory country-of-origin labeling (mCOOL) violates certain provisions in WTO’s Agreement on Technical Barriers to Trade.  The decision supports Canada’s and Mexico’s arguments that mCOOL constitutes an illegal, non-tariff trade barrier that treats U.S. livestock, chicken, and certain other covered perishable commodities more favorably than these commodities imported from Canada and Mexico.

Canada and Mexico filed a WTO challenge against the United States in 2009, claiming mCOOL rules damaged their North American trade of the covered commodities.  When the final report is issued by the WTO later this year, most likely in September, the United States will have 60 days to appeal the WTO decision.  “The U.S. remains committed to helping ensure that consumers get the information they need to make informed buying decisions about these products,” said Nkenge Harmon, spokeswoman for the Office of the U.S. Trade Representative.  If the United States loses its appeal, it must either eliminate the mCOOL regulation or face retaliation from Canada and Mexico as approved by the WTO.

Country-of-origin labeling was originally part of the 2002 Farm Bill and was considered to be voluntary but was to become mandatory by September 30, 2004.  Additions to and clarification of the program were added to the 2008 Farm Bill.  On September 30, 2008, mCOOL was officially implemented but a grace period actually postponed enforcement until March 19, 2009.