Country-of-origin labeling caught up in trade dispute

economic-forecast-headerWhen it comes to determining where beef and poultry products in the supermarket come from, world trade rules and international lawsuits have made it extremely complicated.

More than 12 years ago American farmers asked the federal government to help them tell consumers where their food originated. Country-of-origin-labeling was approved in 2009 as part of the 2008 Farm Bill, but Canada and Mexico immediately filed suit in the World Trade Organization, complaining that U.S. COOL regulations discriminated against their livestock industries.

COOL was written to say that you cannot discriminate against foreign products, that this was just a labeling regulation. But officials in Canada and Mexico asserted that those countries’ animals were worth less because the record-keeping process is so onerous,” said Spencer Neale, Virginia Farm Bureau Federation director of commodity marketing.

Live cattle and hogs have always been moved freely across the Canadian and Mexican borders, Neale said, so it would not be unusual for a cow to be born in Canada, finished in the United States and exported to Mexico.

“One third of U.S. meat products are exported,” he noted, so the whole North American meat sector has been thrown into confusion by COOL. Only processors of large amounts of beef and pork products and grocery stores are covered by COOL. Small-scale meat producers are exempt, Neale said, and other agricultural products such as fresh produce don’t face the same challenges.

In 2011, the WTO ruled that U.S. COOL regulations were discriminatory. The U.S. Department of Agriculture then drafted new regulations. On Oct. 20 the WTO ruled that the latest U.S. COOL regulations continue to be discriminatory. So it’s back to the drawing board for the USDA and the Office of the U.S. Trade Representative, Neale said.

“The meat industry is divided on what to do next,” he added. “Complicating things even more is a recent study by Kansas State University that found that, while a majority of consumers say they want to know where their meat comes from, they don’t seem to follow up on that when they buy meat at the retail level. So there may not be that much of a marketing advantage to COOL, at least not yet.”

The American Farm Bureau Federation and other producer groups still believe there would be a marketing advantage to a WTO-compliant COOL regulation, but the trade situation is so complicated it will take a while longer to develop one, Neale said.

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