S&S writes: “The AB in the COOL dispute found that the detrimental impact of COOL on imported livestock does not stem exclusively from a legitimate regulatory objective but instead reflects discrimination, thus violating Article 2.1 of the TBT Agreement. This conclusion was based on the Appellate Body’s finding that COOL’s recordkeeping and verification requirements, which are the source of detrimental impact on imported livestock, impose a burden on upstream producers and processors that is disproportionate to the level of origin information conveyed to consumers under the regime. In other words, these recordkeeping and verification requirements were not found to stem exclusively from a legitimate regulatory objective, because the origin information tracked under these requirements is not necessarily conveyed to consumers under each of the labels that may be used under the COOL regime.

“The AB identified at least three ways in which the COOL regime fails to fully convey the origin information tracked by producers to consumers. First, the prescribed labels do not expressly identify specific production steps; instead, the COOL measure ‘does not require the labels to mention production steps at all.’ Second, labels B and C (the mixed origin labels) contain confusing or inaccurate origin information, not only because they do not require identification of which production step occurred in which country, but also because they may list countries of origin in any order and because the commingling flexibilities allowed under the regime may indicate that meat is of mixed origin when it in fact is of exclusively U.S. origin.

Third, and finally, upstream producers are required to track the origin of the cattle and meat they produce regardless of its end use (which they often will not know at their upstream stage of production), yet COOL exempts processed food items, items sold in food service establishments, and items not sold through a retailer from labeling requirements.

“As a result of these weaknesses in the COOL labeling regime, the AB concluded that, ‘the detail and accuracy of the origin information that upstream producers are required to track and transmit … { is } significantly greater than the origin information that retailers of muscle cuts of beef and pork are required to convey to their consumers.’ Because the AB could adduce no rational basis for this disconnect, it concluded that the manner in which COOL seeks to provide information to consumers is ‘arbitrary’ and the disproportionate recordkeeping and verification requirements imposed on producers was ‘unjustifiable.’ As a result, the AB concluded that the detrimental impact of the COOL measure on imports reflects discrimination, does not stem exclusively for a legitimate regulatory distinction, and thus violates Article 2.1 of the TBT Agreement.”

Based on this decision opponents of mandatory COOL have asserted that the AB ruled against the U.S. COOL requirements, and thus all mandatory labeling can cease. However, looking at the above analysis, it appears that the problem is that the level of information collected by the producers was not transmitted to the consumers. Thus making changes that will allow the consumers to easily identify where the animal that provides the meat they are purchasing was born, raised, and slaughtered would correct the problems identified by the AB.

In next week’s column we will examine the proposed regulation and see to what extent it makes changes in a way that brings COOL into compliance with the WTO ruling.

 

Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of UT’s Agricultural Policy Analysis Center (APAC). Harwood D. Schaffer is a Research Assistant Professor at APAC. (865) 974-7407; Fax: (865) 974-7298; dray@utk.edu and hdschaffer@utk.edu; http://www.agpolicy.org.

 

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