The U.S. has bought some time for its embattled country-of-origin meat-labeling regulation by appealing the World Trade Organization’s second ruling that the program is unfair to Canada and Mexico.
American diplomats will seek to rebut the world body’s Oct. 20 ruling that the labeling rule gave an unfair advantage to U.S. livestock by forcing meatpackers to segregate and keep detailed records on imported livestock at an added cost.
The U.S. had revised its rule in 2013 after the WTO determined that the original rule, enacted as part of the 2008 Farm Bill, was discriminatory without adequately informing American consumers about the origin of food. The WTO’s initial ruling was upheld on appeal.
Officials from U.S. Trade Representative Michael Froman’s office did not respond to emails seeking comment. U.S. Agriculture Secretary Tom Vilsack said recently he believes Congress must change the law or Mexico and Canada need to negotiate a settlement with the United States, The Associated Press reported.
America’s two neighbors should identify “more clearly and more specifically what, if any, variation of this will work for them,” the agriculture secretary said in November at an event in Kansas City, Mo., according to the news service.
The secretary has said no regulation could likely be crafted that would comply with the WTO’s decisions and still uphold the law Congress passed.
Appeals must be based on points of law such as legal interpretation; they cannot reopen factual findings, the WTO explained on its website. Each appeal is heard by three members of a permanent seven-member Appellate Body comprised by recognized experts unaffiliated with any government, the organization explained.
The appeal will likely be heard in the spring and a ruling could come this summer, University of California-Davis economist Daniel Sumner said recently. If the U.S. loses its appeal, the WTO could give Canada and Mexico the go-ahead to retaliate.
Canada has threatened to impose retaliatory tariffs on more than three dozen American commodities, including beef, pork, rice, corn, apples, cherries and wine. Canada and Mexico could also refuse to honor copyrights on intellectual property, Sumner said.
“Say the U.S. lost on appeal. Then Canada would say, ‘Here’s what we think it was worth,’ and the U.S. would say, ‘No, it’s not that much,’ and we’ll have that dispute,” said Sumner, who was commissioned by the Canadian government to do an economic analysis of COOL’s impacts.
As the rule now stands, labels for steaks, ribs and other cuts of meat must contain not just the country of origin but the production steps — where the cow or hog was born, raised and slaughtered — occurring in each country. The 2013 revision also tightened rules on commingling cattle.
So far, American courts have been emphatic that COOL passes legal muster, sometimes using stark language to reject industry groups’ claim the labeling rule violated their First Amendment free-speech rights and caused them irreparable harm.
But the Canadian Cattlemen’s Association has complained that the labeling regulation has cost cattle producers north of the border approximately $25 to $40 per head since its inception, totaling about $640 million per year. The Canadian government has put the total closer to $1 billion a year.
Canadian agriculture minister Gerry Ritz and trade minister Ed Fast issued a joint statement Nov. 28 blasting the U.S. for filing its appeal.
“With this delay, the United States is yet again preventing both of our countries from enjoying the benefits of freer and more open trade and is hurting farmers, ranchers and workers in the United States and Canada,” they said.
In the United States, industry reactions to Froman’s appeal fell along familiar lines. In press statements, groups including the U.S. Cattlemen’s Association and National Farmers Union praised the move, while critics such as the National Cattlemen’s Beef Association and American Meat Institute have urged Congress to amend or repeal the rule.
For critics of the labeling rule, Congress may represent their best hope of changing or abolishing it. Rep. Mike Conaway, R-Texas, the incoming chairman of the House Agriculture Committee, and Sen. Pat Roberts, R-Kan., expected to head the Senate agriculture panel, are both from cattle-heavy states and have championed the meat industry, the AP reported.
World Trade Organization: http://www.wto.org
U.S. Trade Representative Michael Froman: http://www.ustr.gov