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Country of Origin Labelling - How Far is Too Far?

27 March 2012, at 1:26pm

OPINION - This week the US has decided to appeal a World Trade Organization (WTO) decision, which would force it to change Country of Origin Labelling (COOL) legislation. Charlotte Johnston, ThePigSite editor looks at what has led up to this decision and whether it is justified.

Mandated by the 2002 Farm Bill, Country-of-Origin Labeling (COOL) is a USDA marketing programme which requires retailers to notify their customers of the country of origin of beef, veal, goat meat, lamb, pork, poultry, fish and other perishable agricultural commodities.

Since it was introduced in September 2009 it has been a topic of controversy. Prior to its introduction, US farming unions pushed hard for COOL regulations to be introduced as soon as possible.

Consumer surveys suggested overwhelming support for it, when introduced on farm-raised and wild-caught seafood the programme was an immediate success.

Back in 2008, Mexico and Canada submitted a WTO complaint on US COOL labelling, saying that it blocked free trade.

Both countries have highlighted the fact that US processors are importing fewer livestock, and in some cases heavily discounting imported livestock prices.

The Canadian Cattlemen’s Association (CCA) says there is at least a C$25 to C$35 per head reduction in price on every head of cattle sold regardless of whether they are exported to the US or not. Mexico claims that some producers are seeing a $60 per head reduction in price.

In 2009, the US changed COOL so that products could be labelled from two countries, taking into account where the animal was born, reared and slaughtered.

This would have been accepted by Canada and Mexico, had Tom Vilsack, US Agriculture Secretary just announced the above changes. However, at the same time, he urged US processors and retailers to implement additional voluntary labelling, which angered the Canadian industry and eventually meant that Canada reinstated its dispute to COOL rules with the WTO.

November 2011 - WTO says COOL Inconsistent with US Trade Obligations

In November 2011 WTO agreed with the principle of COOL, however said that the current COOL legislation is inconsistent with the US WTO obligations, as it affords less favourable treatment to Canadian livestock.

The disputes panel also found that COOL does not fulfil its legitimate objective of providing consumers with information on origin.

Last week, the US announced that they are appealing this decision. Whilst it may escalate trade disputes, the decision has received a mixed response from the industry.

What the industry thinks?

The National Farmers' Union and consumer group, Food and Water Watch has welcomed the appeal, saying that it is good news for consumers and farmers.

"We are heartened that the Obama administration has finally stood up against the meat industry’s attack on common-sense rules that let people get vital information about what they are eating," said Food and Water Watch. "WTO's November ruling made it clear once again that the WTO serves global corporate agribusiness interests, not consumers and farmers."

However the National Cattlemen's Beef Association (NCBA) Vice President Bob McCann said he was disappointed with the decision that the US is not willing to work to WTO compliance. He believes that this jeopardises the US's strong trade relationship with Canada and Mexico - two of the US's largest beef importers.

Canadian producers have expressed disappointment in the US decision, with the Canadian Pork Council saying that COOl increases costs and creates inefficiencies without improving consumer information.

The Mexican government has said that it will continue to support the WTO ruling, and do as much as it can to regain market access into the US.

What next?

Some believe that disallowing or changing COOL regulations is denying US producers the opportunity to differentiate their products in their own marketplace.

The debate seems to come back down to US consumers.

Is what is happening in the Canadian and Mexican markets just a case of supply and demand? If the US is now not looking to import these products, should Canada and Mexico look to other export markets?

The Canadian government seem to be fully aware of the risk, and this week initiated negotiations towards a general Japan-Canada Economic Partnership Agreement (EPA).

The Canadian Cattlemen's Association (CCA), recognising that their beef industry is highly export dependent said: "An EPA with Japan would benefit the Canadian beef industry provided the negotiations address long-outstanding issues and barriers.”

At the end of the day it is the consumer who makes the final choice of whether they want to purchase meat from domestic markets or not. Should they not be given as much information as possible in order for them to make an informed choice about the product they purchase?

Hard luck on Canada and Mexico if US consumers don't want their products - either find a unique selling point or search for some new markets.