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Meat Origin Labeling Requirements Amended; Canada Warns of Retaliation

Friday, May 24, 2013
Sandler, Travis & Rosenberg Trade Report

The U.S. Department of Agriculture’s Agricultural Marketing Service has issued a final rule revising the country of origin labeling regulations for muscle cut covered commodities to provide consumers with more specific information. This rule is effective as of May 23 and applies to covered muscle cut commodities produced or packaged on or after that date, although the AMS plans to focus on industry education and outreach for the first six months.

The 2008 Farm Bill revised the previous mandatory COOL requirements to provide that in order for a commodity to be labeled as a product of the U.S. all production activities associated with the commodity have to occur on U.S. soil or in U.S. waters. For products produced in the integrated North American marketplace, the label must indicate every country in which a stage of production has taken place. The 2008 Farm Bill also imposed mandatory COOL requirements for muscle cuts of beef (including veal), lamb, chicken, goat and pork; ground beef, lamb, chicken, goat and pork; wild and farm-raised fish and shellfish; perishable agricultural commodities; macadamia nuts; pecans; ginseng; and peanuts.

The WTO found that these requirements were inconsistent with U.S. obligations under the WTO Agreement on Technical Barriers to Trade to accord imported products treatment no less favorable than that accorded to domestic products. The AMS is therefore amending its regulations to require origin designations for muscle cut covered commodities derived from animals slaughtered in the U.S. to specify the production steps of birth, raising and slaughter of the animal from which the meat is derived that took place in each country listed on the origin designation. This rule also eliminates the allowance for commingling of muscle cut covered commodities of different origins, which a Congressional Research Service report says could discourage U.S. producers from using imports.

The COOL regulations also require any person engaged in the business of supplying a covered commodity to a retailer to provide the retailer with the product’s country of origin information. The AMS is now amending the definition of “retailer” to include any person subject to be licensed as retailer under the Perishable Agricultural Commodities Act, whether or not they actually have a PACA license.

While the AMS believes that these changes will bring the mandatory COOL requirements into compliance with U.S. international trade obligations, Mexico and Canada, which filed the underlying WTO case, say the new rule “makes things worse.” Canada has raised the possibility of seeking WTO authorization to retaliate against U.S. exports.

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