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Lawmakers, Meat Industry Seek Delay in Origin Labeling Rules

Wednesday, January 15, 2014
Sandler, Travis & Rosenberg Trade Report

An omnibus fiscal year 2014 appropriations bill making its way through Congress includes a provision urging the Department of Agriculture to delay revised regulations concerning the country of origin labeling of meat products, according to a CQ Roll Call article. Lawmakers want the rules put on hold pending a World Trade Organization decision expected this spring on whether the regulations comply with WTO rules; if not, Canada and Mexico could be authorized to impose billions of dollars’ worth of trade sanctions against U.S. exports. Members of a House-Senate conference committee trying to hammer out a new farm bill are reportedly considering repealing the COOL law provisions on meat altogether.

In related news, the U.S. meat industry offered arguments before a federal appeals court Jan. 9 in a case challenging the USDA’s COOL regulations. According to press reports, the industry argued that these regulations violate First Amendment protections against compelled speech, pose a financial burden that will increase consumer prices, and could expose the U.S. to significant retaliatory sanctions in the WTO case. An attempt to stay the rules while the litigation is ongoing was rejected by a lower court, and the appeals court is expected to rule within the next few weeks on whether to uphold that action.

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.

In May 2013 the USDA revised its regulations implementing the COOL law following a WTO ruling that they 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 revised regulations 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. The rule also eliminated the allowance for commingling of muscle cut covered commodities of different origins. The changes were effective as of May 23, 2013, and applied to covered muscle cut commodities produced or packaged on or after that date, although the USDA said it planned to focus on industry education and outreach for the first six months.

While the USDA believes these changes will bring the COOL regulations into compliance with U.S. international trade obligations, Mexico and Canada, which filed the underlying WTO case, have said the new rule “makes things worse.” The two countries have therefore requested a WTO decision on the matter and are expected to seek authorization to impose retaliatory measures if that determination is negative. Canada issued last June a list of U.S. goods that could be subject to such measures, and Mexico has warned that it could target products such as fruits and vegetables, juices, meat, dairy products, machinery, furniture and home appliances.

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