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WTO Appellate Body Issues COOL Ruling

On May 18 the WTO Appellate Body upheld most aspects of a compliance panel report (which was released in October 2014) finding that U.S. mandatory country-of-origin labeling (COOL) requirements for meat are inconsistent with international trade obligations. A summary of the Appellate Body’s findings and conclusions, as well as its full report, are available online.

The next likely step is for the governments of Canada and Mexico to begin the process of establishing damages. If damages are sanctioned by the WTO, this would clear the way for Canada and Mexico to establish retaliatory tariffs on imports of selected U.S. products, and to notify the WTO of these tariff rate increases. It is important to note, however, that the U.S. government will have the opportunity to contest the proposed damages, so this process can take several months.

The ruling gave momentum to congressional efforts to modify the statute that underlies USDA’s COOL regulations. On May 20, the House Agriculture Committee voted 38-6 to approve legislation repealing COOL requirements for beef, pork and chicken. The bill (H.R. 2393) now advances to the full House for consideration. The timeline for the issue to be taken up in the Senate is not yet clear.