Country-of-Origin Labeling for Foods and the WTO Trade Dispute on Meat Labeling

Summary

Since the final rule to implement country-of-origin labeling (COOL) took effect in March 2009, most retail food stores have been required to inform consumers about the country of origin of fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng, and ground and muscle cuts of beef, pork, lamb, chicken, and goat. The rules were required by the 2002 farm bill (P.L. 107-171) as amended by the 2008 farm bill (P.L. 110-246). COOL for beef and pork resulted in a World Trade Organization (WTO) dispute settlement case with Canada and Mexico that started in 2009 and finally concluded in 2015.

Canada and Mexico challenged U.S. COOL in the WTO, arguing that COOL had a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market, thus violating WTO trade commitments. In November 2011, the WTO dispute settlement panel found that COOL treated imported livestock less favorably than U.S. livestock, and did not meet its objective to provide complete information to consumers on the origin of meat products. In March 2012, the United States appealed the WTO ruling.

In June 2012 the WTO's Appellate Body (AB) upheld the panel's finding that COOL treated imported livestock less favorably than domestic livestock. But the AB reversed the finding that COOL did not fulfill its legitimate objective to provide consumers with information on origin. The United States welcomed the WTO's affirmation of the right to adopt labeling requirements to inform consumers on the origin of their meat. Participants in the U.S. livestock sector had mixed reactions, reflecting the ongoing heated debate on COOL.

In order to meet a compliance deadline of May 23, 2013, USDA issued a revised COOL rule requiring that labels show where each production step (born, raised, slaughtered) occurred and prohibited the commingling of muscle-cut meat from different origins. COOL's supporters applauded the revised rule for providing consumers with specific, useful information on origin.

In September 2013, a compliance panel was formed to determine if the revised COOL rule complied with WTO agreements. On October 20, 2014, the panel found that the revised COOL rule treated imported livestock less favorably than domestic livestock. The panel confirmed that COOL was a legitimate objective, but could not determine if the rule was more trade restrictive than necessary. The United States appealed the compliance panel findings in November 2014, and the AB heard the appeal in February 2015. The AB report, released in May 2015, again found that COOL violated U.S. WTO obligations.

On June 4, 2015, Canada and Mexico requested authorization to retaliate against U.S. imported products in the amount of US$3 billion. The United States objected to the requests, and on September 15-16, 2015, an arbitration panel met to determine the appropriate level of retaliation. On December 7, 2015, the arbitration panel set the retaliation levels at C$1.055 billion (US$781 million) for Canada and at US$228 million for Mexico.

On December 18, 2015, Congress repealed the COOL requirements for beef and pork and ground beef and pork in the enacted Consolidated Appropriations Act, 2016 (P.L. 114-113). After the repeal by Congress, USDA halted enforcement of COOL for beef and pork.

On December 21, 2015, the WTO authorized Canada and Mexico to retaliate against products imported from the United States. Canada and Mexico stated that they were pleased with the repeal of COOL but will retain the authority to retaliate until they are assured that cattle and hog trade is unimpeded as the repeal of COOL is implemented.

On March 2, 2016, USDA issued a final rule that amended the COOL regulations to bring them into conformity with P.L. 114-113. Congressional repeal of COOL for beef and pork and the amended regulations have brought the United States into compliance with its WTO obligations.

Recent COOL Developments

On May 18, 2015, the World Trade Organization's (WTO) Appellate Body confirmed the findings of previous panels that U.S. country-of-origin labeling (COOL) for beef and pork violated U.S. WTO obligations by discriminating against imported livestock. In June 2015, Canada and Mexico requested permission from the WTO to impose about US$3 billion in concessions, in the form of retaliatory tariffs, against products imported from the United States. The United States objected to the request, and an arbitration panel was established to determine the appropriate level of concessions.

On July 23, 2015, Senator Hoeven introduced the Voluntary Country of Origin Labeling (COOL) and Trade Enhancement Act of 2015 (S. 1844), which, like H.R. 2393, repeals mandatory COOL for beef, pork, chicken, and their ground products. In addition, S. 1844 amends the Agricultural Marketing Act (7 U.S.C. §1621 et seq.) requiring USDA to establish a label designation that enables meat processors to voluntarily use a U.S. label for beef, pork, and chicken from livestock exclusively born, raised, and slaughtered in the United States.

Also, during debate on the vehicle for the Senate transportation reauthorization bill (H.R. 22), Senator Roberts, Chairman of the Agriculture Committee, introduced an amendment (S.Amdt. 2302) to repeal mandatory COOL for beef, pork, and chicken using language from H.R. 2393. On July 26, 2015, Senator Hoeven also introduced S. 1844 as an amendment (S.Amdt. 2371) to the transportation bill. Neither amendment was considered for inclusion in the final Senate-passed bill.

Canada and Mexico have stated that the only way to resolve the WTO case is to repeal COOL. In response to Senator Hoeven's proposed voluntary program, Canada's Agriculture Minister said such a program would "guarantee Canadian retaliation" because it would continue to discriminate against imported livestock through segregation.¹

If a voluntary COOL program was implemented, and Canada or Mexico opposed it, the United States could request that a WTO compliance panel determine if the new program is compliant with WTO requirements. Canada and Mexico could implement retaliation even if mandatory COOL is repealed and is replaced with a voluntary program. U.S. products would face higher tariffs while the compliance panel reviews the new voluntary program.

The WTO arbitration panel met on September 15-16, 2015, to hear arguments to determine the level of concessions for Canada and Mexico. On December 7, 2015, the arbitration panel released its report, which found that Canada could request retaliation of C$1.055 billion (US$781 million) and Mexico US$228 million.

As many stakeholders expected, the enacted Consolidated Appropriations Act, 2016 (P.L. 114-113, Div. A, Sec. 759) repealed COOL for beef and pork and ground beef and pork by amending the COOL statute. After COOL was repealed by Congress, the Secretary of Agriculture said that USDA would immediately halt enforcement of COOL and rewrite the COOL regulations to reflect the repeal of beef and pork. Unlike the House COOL repeal bill (Country of Origin Labeling Amendments Act of 2015; H.R. 2393) passed in June 2015, the repeal language in P.L. 114-113 did not include chicken and ground chicken products. Also, the legislation did not include any voluntary COOL provisions similar to what Senator Hoeven introduced in the Voluntary Country of Origin Labeling (COOL) and Trade Enhancement Act of 2015 (S. 1844) in July 2015.

Congressional repeal of COOL for beef and pork brings the United States into compliance with its WTO obligations and effectively ends the COOL case. On December 21, 2015, Canada and Mexico took the procedural step of formally requesting authorization to retaliate, and the DSB granted the request (see "Suspension of Concessions (Retaliation)" below for more information). Canada and Mexico have stated that they are pleased with the repeal of COOL.² Although the threat of retaliation now has been removed, Canada and Mexico are likely to retain the authority to retaliate until USDA formally rescinds existing COOL regulations for beef and pork, and until Canada and Mexico are assured that cattle and hog trade is unimpeded as the repeal of COOL is implemented.

On March 2, 2016, USDA issued the final rule to amend COOL regulations for beef, pork, and ground beef and pork by striking all references to beef and pork.³ The rulemaking brings COOL regulations into conformity with the repeal amendment in Section 759 of P.L. 114-113.

Opponents of ending these exceptions to COOL contended that there was little or no real evidence that consumers want such information and that industry compliance costs would far outweigh any potential benefits to producers or consumers. Such opponents, including some farm and food marketing groups, argued that mandatory COOL for meats, produce, or other agricultural commodities was a form of protectionism that would undermine U.S. efforts to reduce foreign barriers to trade in the global economy. COOL supporters countered that it was unfair to exempt agricultural commodities from the labeling requirements that U.S. importers of almost all other products already must meet, and that major U.S. trading partners impose their own COOL requirements for imported meats, produce, and other foods.

Mandatory country-of-origin labeling (7 U.S.C. §1638 et seq.):

The meat labeling requirements have proven to be among the most complex and controversial areas of rulemaking, in large part because of the steps that U.S. feeding operations and packing plants must adopt to segregate, hold, and slaughter foreign-origin livestock separately from U.S. livestock. After AMS issued the interim rules in August 2008, many retailers and meat processors reportedly planned to use the "catch-all" multiple countries of origin label on as much meat as possible—even products that would qualify for the U.S.-only label, because it was both permitted and the easiest requirement to meet. COOL supporters objected that the label would be overused, undermining the intent of COOL (i.e., to distinguish between U.S. and non-U.S. meats).¹⁰ In an effort to balance the concerns of both sides, USDA issued a statement attempting to clarify its August 2008 interim rule, stating that meats derived from both U.S.- and non-U.S.-origin animals may carry a mixed-origin claim (e.g., "Product of U.S., Canada, and Mexico"), but that the mixed-origin label cannot be used if only U.S.-origin meat was produced on a production day.¹¹

The final (January 2009) rule attempted to further clarify the "multiple countries of origin" language. For example, muscle cut products of exclusively U.S. origin along with those from foreign-born animals, if commingled for slaughter on a single production day, can continue to qualify for a combined U.S. and non-U.S. label. "It was never the intent of the Agency [AMS] for the majority of product eligible to bear a U.S. origin declaration to bear a multiple origin destination. The Agency made additional modifications for clarity," AMS stated in material accompanying the rule.¹²

The clarifying changes failed to mollify some. The National Farmers Union (NFU) continued to view this portion of the rule as a "loophole that would allow meat packers to use a multiple countries, or NAFTA [North American Free Trade Agreement] label, rather than labeling U.S. products as products of the United States" and stated "[t]his is misleading to consumers."¹³ Seven Senators highlighted similar concerns, stating that it would allow "meatpackers to put a multiple country of origin label on products that are exclusively U.S. products as well as those that are foreign." They characterized the final rule as defeating COOL's primary purpose to provide "clear, accurate and truthful information" to U.S. consumers, and hoped the rules will be revised "to close these loopholes."¹⁴

Muscle Cuts & Ground Meat Categories

COOL Statutory Definition

AMS Final Rule (January 2009)

United States Country of Origin

[Category A or Label A]

"beef [or] ... pork ... derived from an animal that was ... exclusively born, raised, and slaughtered in the United States"

For beef and pork, means:

Product of the US(A)

Multiple Countries of Origin

[Category B or Label B]

"beef [or] ... pork ... derived from an animal that is—

(i) not exclusively born, raised and slaughtered in the United States;

(ii) born, raised or slaughtered in the United States; and

(iii) not imported into the United States for immediate slaughter"

Product of the U.S., Country X, and (as applicable) Country Y

Imported for Immediate Slaughter

[Category C or Label C]

"beef [or] ... pork ... derived from an animal that is imported into the United States for immediate slaughter"

Product of Country X, U.S.

Foreign Country of Origin

[Category D or Label D]

"beef [or] ... pork ... derived from an animal ... not born, raised, or slaughtered in the United States"

Product of Country X

Ground Beef or Pork

"notice ... for ground beef, ground pork ... shall include a list of all [or] ... all reasonably possible countries of origin of such ground beef, ground pork, ..."

Product of U.S., Country X, (and as applicable) Country Y, Country Z, ...

USDA's AMS oversees COOL through a retail and supplier surveillance program. AMS has cooperative agreements with all 50 states to conduct audits of retailers and suppliers that are covered under COOL. In 2014, the COOL program conducted 2,982 retail surveillance reviews and 570 follow-up reviews to ensure compliance with COOL requirements.¹⁸ About 37,000 individual retail stores are subject to COOL regulations. In 2014, AMS found that retailer COOL compliance was at 91%, compared to 96% in both 2012 and 2013. AMS conducted audits on 113 products in the supplier chain. Compliance from supplier to retailer was 98%. In 2014, muscle cuts of meat were not audited. The AMS COOL program was funded at about $5 million in FY2014, with funding of $4.8 million expected in FY2015 and FY2016.

USDA's Office of Inspector General (OIG) audited the operations of the COOL program during 2010. Its report noted that "AMS made significant strides implementing the final rule" but found the need for improvements in its controls and processes to ensure that retailers and suppliers fully comply with COOL regulations. The OIG identified the need for AMS to strengthen its process to select retailers to be reviewed and the review process itself, and to more quickly evaluate the documentation kept by retailers and issue noncompliance letters. Auditors also pointed out that AMS needs to be more vigorous in enforcing COOL requirements, provide better oversight of the state agencies that conduct retailer reviews, and improve how it communicates with and provides program guidance to retailers. AMS agreed with all of the OIG recommendations, and by late 2012, had incorporated 11 of them into program operations.¹⁹

Canada and Mexico requested consultations with the United States in December 2008 and June 2009 about their concerns. Not satisfied with the outcome of these consultations with U.S. officials, both countries in early October 2009 requested the establishment of a WTO dispute settlement (DS) panel to consider their case. In response, the U.S. Trade Representative (USTR) and the Secretary of Agriculture commented that they "regretted that the formal consultations" did not resolve concerns, and stated their belief that U.S. implementation of COOL provides consumers with information that is consistent with WTO commitments. They noted that countries worldwide had agreed that the principle of country-of-origin labeling was legitimate policy long before the WTO was created, and that other countries also require goods to be labeled with their origin.²⁰

Both the Canadian and Mexican governments, in requesting a panel, asserted that COOL is inconsistent with U.S. obligations under certain WTO agreements—the General Agreement on Tariffs and Trade 1994, the Agreement on Technical Barriers to Trade, and the Agreement on Rules of Origin. These obligations include treating imports no less favorably than like products of domestic origin; making sure that product-related requirements are not more trade restrictive than necessary²¹ to fulfill a legitimate public policy objective; ensuring that compliance with laws on marks of origin does not result in damaging imports, reducing their value, or unreasonably increasing their cost; and ensuring that laws, rules, and procedures on country of origin do not "themselves create restrictive, distorting, or disruptive" international trade, among others.

On November 19, 2009, the WTO's Dispute Settlement Body (DSB)²² established a panel to consider both countries' complaints. In proceeding with this WTO case, Canadian officials stated that the COOL requirements are "so onerous" that when they were implemented, Canadian exporters of cattle and hogs were discriminated against in the U.S. market. The Canadian beef and pork industries, led by the Canadian Cattlemen's Association (CCA) and the Canadian Pork Council, actively pushed their government to initiate a WTO challenge. The CCA argued that COOL cost its producers C$92 million over the two months following the publication of the interim rule in August 2008, and could cost C$500 million per year. CCA estimated that slaughter steers and heifers were losing C$90 per head, because U.S. meat establishments did not want to assume the increased costs of complying with new labeling requirements by segregating, holding, and then slaughtering Canadian cattle separately from U.S. cattle. The losses included lower prices for all Canadian cattle due to decreased U.S. demand, as well as the cost of shipping those that are sold further distances to the fewer number of U.S. plants willing to take them. Canadian pork producers expressed similar concerns.²³

The National Cattlemen's Beef Association (NCBA) expressed concern that Canada's decision to pursue its case against U.S. COOL rules has the potential for retaliatory action to be taken against U.S. beef. It noted that "COOL has damaged critically important trading relationships [i.e., the import of Canadian and Mexican livestock, the value added as they pass through U.S. feedlots and are processed into meat, and the export of finished meat products back to Mexican and Canadian consumers], and is not putting additional money into the pockets of cattlemen."²⁶

In opposition, the U.S. Cattlemen's Association (USCA) and the National Farmers Union (NFU) argued that COOL is "fully consistent" with the General Agreement on Tariffs and Trade and the Agreement on Technical Barriers to Trade (key WTO commitments). Both stated that COOL "does not discriminate between domestic and imported beef ... [and] operates neutrally in the market place," and noted that COOL does not impose any domestic content requirements (i.e., does not stipulate what share of value or quantity determines country of origin).²⁷ The Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF), presented similar comments.²⁸

With the WTO's release of the DS panel's report, USTR welcomed its affirmation of "the right of the United States to require country of origin labeling for meat products." Acknowledging that the panel disagreed with the details on how the U.S. COOL requirements were designed, it expressed the U.S. commitment to provide "consumers with accurate and relevant information [on] the origin of meat products that they buy at the retail level." USTR stated that it would consider all options going forward, including an appeal.³¹

The U.S. meat sector expressed mixed reactions. Those in favor of making changes to COOL to address the panel's conclusions include NCBA, AMI, and the National Pork Producers Council (NPPC). The NCBA advised against appealing this ruling. Instead, it urged USTR to work "to apply pressure on Congress to bring the United States into WTO compliance across the board" and to act quickly before Canada and Mexico—two important trading partners—impose "unnecessary and unfortunate tariffs" on U.S. agricultural exports. NPPC "will be working with lawmakers to craft a legislative fix so that [COOL] is WTO-compliant" to avoid risking "retaliation from and a trade war with Canada and Mexico." AMI commented that the ruling "was not surprising," stating that it had "contended for years ... that [COOL] was not just costly and cumbersome, but a violation of our country's WTO obligations."³²

Among other groups that opposed COOL, the Food Marketing Institute (FMI) agreed with the panel's conclusion that COOL "fails to provide information in a meaningful way" and highlighted that "COOL enforcement has become more burdensome than ever ... for retailers." Its spokesman stated that COOL "will need to be repealed or rewritten for the U.S. to meet its [trade obligations]" and that FMI will work with Congress and USDA "to develop an alternative system" that informs consumers with useful information.³³

Livestock groups that support COOL as now implemented include R-CALF and USCA. R-CALF responded that "the WTO is trying to usurp our nation's sovereignty," questioning "when do we allow an international tribunal to dictate to our U.S. Congress what is or is not a legitimate objective of providing information to United States' citizens?" USCA strongly disagreed with the panel's findings, but was pleased that the report "affirmed the right of the U.S. to label meat for consumers." Its president expressed support for USTR's efforts to defend U.S. rights, pledging to assist "with the appeal process" and to work "with our allies in the Administration and Congress to ensure that COOL continues."³⁴

Among others supporting COOL, the NFU responded that it will work with USTR and USDA "to ensure that COOL is implemented to the fullest extent of the law and in accordance with WTO." Its statement concluded that "if these results are unsatisfactory, then NFU will push to appeal the decision and continue to fight ... to ensure COOL is allowed to continue for as long as it takes to get this done." Public Citizen commented that the WTO's ruling against COOL for meats "make[s] it increasingly clear to the public that the WTO is leading a race to the bottom in consumer protection" by its second-guessing "the U.S. Congress, courts and public by elevating the goal of maximizing trade flows over consumer and environmental protection." Food and Water Watch urged the Administration to appeal the ruling, noting that the WTO "should not get to decide what U.S. consumers get to know about their food and should not be able to undermine rules put in place by U.S. elected officials."³⁵

Members of Congress also hold diverse views on COOL's future. Some did not expect the WTO panel's decision on COOL to be favorable and view more "unwinnable" WTO cases as not in the "best interest" of U.S. agricultural producers. At a regional livestock meeting, Senator Pat Roberts, then ranking Member of the Senate Agriculture Committee, stated that he does not know of any market study that "shows American consumers will buy more American products with labels in the store" and hoped "we can change people's minds."³⁶ By contrast, 19 Senators requested that the Obama Administration appeal the panel's ruling and "work to ensure that our COOL program both meets our international trade obligations while continuing to provide such information to consumers." Their letter expressed concern about the ruling's impact "on our ability to continue providing [COOL] information to consumers" and noted that congressional intent behind the 2008 statutory changes was for "such labeling [to] be nondiscriminatory in its treatment of imported products by requiring the labeling of both domestic as well as imported products." The letter further stated that the final COOL rule "appropriately establishes a labeling system which provides important and useful information to consumers while not placing an undue burden on the industry" and which "continues to provide the same opportunity for imported livestock to compete in the domestic marketplace as was the case prior to USDA's implementation of COOL."³⁷

The Canadian government welcomed the panel's ruling as a "clear victory for Canada's livestock industry." Its Minister of Agriculture stated that the WTO decision "recognizes the integrated nature of the North American supply chain in this vitally important industry" and that "[r]emoving onerous labelling measures and unfair, unnecessary costs will improve competitiveness, boost growth and help strengthen the prosperity of Canadian and American producers alike." He expressed the hope this ruling "will open the door to a negotiated settlement of the dispute" and stressed Canada's commitment to work with the United States to "create a stronger more profitable livestock industry on both sides of the 49^th parallel."³⁸

The Canadian Pork Council (CPC) stated that the panel's report "vindicates [the] objections" the pork industry had to COOL legislation, which it believes restricts market access (i.e., the movement of live swine to the U.S. market) and constitutes a technical barrier. The CPC plans to work "with like-minded groups in the U.S. to find a meaningful solution without further litigation" (referring to a possible U.S. appeal and the process that would follow). The Canadian Cattlemen's Association (CCA) stated the ruling confirms Canada's position that COOL discriminates against live cattle shipped to the United States to the detriment of Canadian cattle producers. In particular, it noted that since taking effect, COOL "has increased costs for U.S. companies that import live Canadian cattle," which has reduced "the competiveness of those Canadian cattle in the U.S. market." The CCA plans to continue working with the U.S. industry "not ... for the outright repeal of COOL but [to] seek only those regulatory and statutory changes necessary to eliminate the discrimination that COOL has imposed to the comparative disadvantage of livestock imported into the U.S. vis-a-vis U.S. livestock."³⁹

Under WTO rules, the United States had various options available to respond to the dispute panel's adverse ruling on certain aspects of U.S. COOL. One was to accept the decision and make changes to the COOL statute and/or regulations to comply with the WTO findings. Another was to appeal the panel report on legal issues.

On March 23, 2012, the United States appealed two findings of the DS panel's report to the WTO Appellate Body (AB).⁴⁰ A USTR spokeswoman restated its position that the report had confirmed the U.S. right to adopt rules to inform consumers of the country of origin in their purchasing decisions, but expressed disappointment that the panel "disagreed with the way that the United States designed its COOL requirements" for beef and pork. USTR's chief counsel stated that the U.S. appeal is "a signal of our commitment" to ensure that consumers "are provided with accurate and relevant information" on the origin of beef and pork, and "to fight for the interests of U.S. consumers at the WTO."⁴¹

Interest groups that had urged the Obama Administration to appeal the WTO report (R-CALF, USCA, NFU, Food and Water Watch, Public Citizen) supported this decision. Those that advocated resolving this dispute (NCBA, NPPC, AMI) expressed disappointment, and noted that the appeal jeopardizes strong trading relationships with Canada and Mexico and invites the prospect of retaliation by these two countries against U.S. meat exports.

Canada's Agriculture Minister expressed disappointment that the United States appealed, stating his confidence that the WTO findings "will be upheld so that trade can move more freely, benefiting producers and processors on both sides of the border." Mexico's Economic Ministry declared that it would defend Mexico's interests in the appeal process, and that it plans to file its own notice of appeal seeking a review of some issues in the panel's report that it says reflect inadequate legal analysis.

On July 23, 2012, the Dispute Settlement Body (DSB) adopted the AB's report and the DS panel's report, as modified by the AB, under the reverse consensus rule. Under this rule, both reports are adopted unless all WTO member countries present at the meeting vote not to do so. This rule makes adoption virtually automatic.⁴² In turn, the United States, Canada, and Mexico were required to unconditionally accept the AB's decision. The DSB, as is the practice, did not specify what the United States must do to comply with these reports' findings.

The WTO's Dispute Settlement Understanding (DSU) lays out a multi-step process for a country to comply with the adopted WTO findings.⁴³ Once WTO findings are adopted by the DSB, a compliance deadline is established. If a party or parties to a dispute believe compliance measures fail to meet WTO obligations, the process may move into a compliance panel phase. If that does not resolve disagreements among parties, the dispute could move into a retaliation phase. A resolution to a WTO case may be delayed for months as the parties work through the compliance and/or retaliation processes.

After the adoption of the dispute settlement reports, the United States had up to 30 days to inform the DSB of its plans to implement the WTO findings. If a country is unable to comply immediately, the DSU allows for a "reasonable period of time" for this to occur. Often, WTO members are given approximately one year from the date of adoption of the panel report to comply. If the disputing countries fail to agree on a compliance deadline, as occurred in this case, an arbitrator may determine the deadline.

Because the United States, Canada, and Mexico could not agree on a timetable or an arbitrator, the WTO Director-General appointed one. In the arbitration hearing, the United States argued that 18 months were needed to pursue the steps required to adopt a regulatory response. Canada argued that six months would be sufficient. Mexico argued for an eight-month compliance period, but would welcome six. On December 4, 2012, the arbitrator determined that 10 months from the reports' adoption (July 23, 2012) was a reasonable period of time for the United States to comply. The United States was given until May 23, 2013 to bring COOL into WTO compliance.

Animal Origin of Muscle Cuts

Original COOL Label (January 2009)

Revised COOL Label (May 2013)

Muscle cuts from animals exclusively born, raised, and slaughtered in the U.S.; and animals born and raised in Alaska or Hawaii and transported for a period of not more than 60 days through Canada to the U.S. and slaughtered in the U.S.

Product of the U.S.

Born, Raised, and Slaughtered in the U.S.

(1) Muscle cuts from animals born in Country X and (as applicable) Country Y, and raised and slaughtered in the U.S., excluding animals imported for immediate slaughter.

(2) Muscle cuts from animals born, raised, and slaughtered in the U.S. that are commingled during a production day with muscle cuts from animals born outside the U.S., raised and slaughtered in the U.S., and not imported for immediate slaughter.

(3) Muscle cuts from animals born in Country X, and (as applicable) Country Y, raised and slaughtered in the U.S., that are commingled during a production day with muscle cut derived from animals that are imported into the U.S. for immediate slaughter.

(1) Product of the U.S., Country X and (as applicable) Country Y

(2) Product of the U.S., Country X and (as applicable) Country Y

(3) Product of the U.S., Country X and (as applicable) Country Y

(1) Born in Country X, Raised and Slaughtered in the U.S.

(2) Not applicable because commingling is no longer allowed

(3) Not applicable because commingling is no longer allowed

Muscle cuts from animals imported into the United States for immediate slaughter.

Product of Country X, U.S.

Born and Raised in Country X, Slaughtered in the U.S.

Imported muscle cuts for which no production steps occurred in the United States.

Product of Country X

Unchanged

The reaction of supporters and opponents of COOL to the compliance panel findings are similar to those expressed about the dispute panel and Appellate Body findings. Supporters view the compliance panel findings as a win because the WTO again confirmed that it is a legitimate objective for a government to provide origin information about beef and pork to consumers. COOL supporters, such as NFU and USCA, have called on the United States to appeal the compliance panel ruling, and have strongly objected to calls for repeal of the COOL law.⁷⁴ Supporters believe that the WTO process should proceed, and that the deficiencies the WTO found in the COOL rule could be corrected through revised regulations. On January 22, 2015, the National Farmers Union issued a new study that counters claims that COOL caused the decline in cattle exports to the United States.⁷⁵

Opponents of COOL continue to believe that revised regulations will not successfully allow the United States to comply with the WTO findings and that the COOL law must be repealed. The COOL Reform Coalition, a group of more than 100 business and agribusiness organizations concerned about the potential effects of Canada and Mexico retaliation, have urged Congress to direct USDA to immediately rescind parts of COOL that violate WTO obligations.⁷⁶ This would act as an interim step to provide Congress the time to repeal the COOL law.

However, congressional views on COOL are mixed. In July 2014, 112 House members signed a letter to USDA recommending that the Secretary rescind the revised COOL rule if the WTO found against the United States.⁷⁷ But on October 6, 2014, 32 Senators sent a letter to the Senate Appropriations Committee, asking that no appropriations action be taken on COOL until the WTO process was completed.⁷⁸

Canada and Mexico issued a joint statement calling for the reintegration of the North American cattle and hog market through the repeal of the COOL law. They reiterated that both countries would seek authorization to retaliate against U.S. agricultural and nonagricultural products if the COOL case was not satisfactorily resolved.⁷⁹

On June 4, 2015, Canada requested that the DSB authorize the suspension of concessions in the amount of C$3.068 billion (US$2.4 billion)⁸⁰ and Mexico requested authorization of US$653.5 million. Mexico subsequently revised its request to $713 million at the June 17, 2015, DSB meeting. The United States objected to the requests, and Canada and Mexico's requests were referred to an arbitration panel.

On July 30, 2015, USTR released a public version of its WTO submission to the arbitration panel refuting the value of damages claimed by Canada and Mexico.⁸¹ In total, USTR estimated damages from COOL at about $91 million, $43.2 million for Canada and $47.6 for Mexico. The arbitration panel heard the case for the suspension of concessions on September 15 and 16, 2015.

The WTO DSU provides that a country cannot suspend WTO concessions or other obligations as retaliatory measures in a dispute unless authorized by the WTO DSB. Canada and Mexico will formally request authorization from the DSB, and they may then implement the decision. Retaliation is terminated once the United States brings COOL into compliance or the parties reach an agreement that resolves the case. If unauthorized retaliation were to occur, the United States could challenge such retaliation in a separate WTO dispute settlement proceeding.

On December 7, 2015, the arbitration panel released its report, which valued Canada's annual trade losses due to COOL at C$1.055 billion (US$781 million)⁸³ and Mexico's losses at $228 million.⁸⁴ The total amount of approved retaliation was slightly more than $1 billion, about one-third of the amount requested by Canada and Mexico. The arbitration panel based the level of retaliation on direct export losses for Canada and Mexico caused by COOL. The panel did not consider indirect losses. These were losses included in the retaliation requests that accounted for reduced prices received by Canadian and Mexican domestic livestock sectors due to the negative effects of COOL on exports.

On December 21, 2015, the DSB granted concessions to Canada and Mexico, authorizing them to retaliate against imports of products from the United States. Although COOL for beef and pork was repealed on December 18, 2015, Canada and Mexico's formal request for authorization completed one of the last procedural steps of the dispute settlement process.

As the WTO COOL case winds its way to conclusion, there have been increased calls for Congress to act on COOL. Some lawmakers agree with criticisms of COOL and could offer legislation to limit its scope and impacts, or outright repeal. Others remain strongly supportive of COOL as enacted and oppose any rollback. Efforts to modify COOL were also part of the 2014 farm bill debate but ultimately not included in the enacted law.

In November 2014, Secretary of Agriculture Vilsack said that USDA analysis shows that there is no regulatory fix that would allow COOL regulations to be consistent with the COOL law and also satisfy the WTO rulings. Vilsack said that Canada and Mexico would need to specifically say what measures would be acceptable, or Congress would have to provide, in the law, "different directions" to USDA to allow for WTO compliance.⁸⁵

On May 1, 2015, USDA delivered to Congress the economic study of COOL as required by Section 12104 of the 2014 farm bill (see "Farm Bill" below).⁸⁶ Results of the study were similar to earlier studies of COOL and USDA's Regulatory Impact Analysis performed during the rulemaking process. USDA found that COOL information may be of some benefit to consumers that want the information, but there is insufficient evidence to conclude that demand for beef and pork will increase from the benefit. The study concluded that without an increase in demand for beef and pork, the costs of implementing COOL results in losses for producers (livestock producers, packers, processors, and retailers) along the supply chain.

The FY2015 appropriations act (P.L. 113-235) directed USDA to submit a report with recommendations for addressing COOL. As directed, on May 1, 2015, USDA Secretary Vilsack sent letters to the leadership of the House and Senate Agriculture Committees and the House and Senate Appropriations Subcommittees on Agriculture suggesting that the COOL statute be repealed or a generic label be established that might satisfy U.S. WTO obligations.

On December 18, 2015, in response to the WTO arbitration panel's decision to allow Canada and Mexico to retaliate against imported products from the United States, Congress used the annual appropriations process to permanently repeal COOL for beef and pork and their ground products. Section 759 of the enacted Consolidated Appropriations Act, 2016 (P.L. 114-113, Division A) removed references to muscle cuts of beef and pork and ground beef and pork from the COOL statute (7 U.S.C. §1638 et seq.). On the same day, Secretary Vilsack stated that USDA would immediately halt the enforcement of COOL requirements for beef and pork and amend the COOL regulations as soon as possible to reflect the change in COOL law.⁸⁷

The repeal provision differed from the House repeal bill (see "House Repeals COOL for Beef, Pork, and Chicken" below) in that chicken and ground chicken were not included in the repeal. Also, some stakeholders had hoped that Congress would have considered repealing mandatory COOL for beef and pork and enacting a voluntary COOL provision at the same time (see "Senate Introduces Repeal and a Voluntary COOL" below). The continued threat of retaliation by Canada and Mexico over a voluntary program likely made this scenario unfeasible under the tight timeline that the United States faced on retaliation.

On May 18, 2015, House Agriculture Committee Chairman Conaway introduced the Country of Origin Labeling Amendments Act of 2015 (H.R. 2393) that would repeal beef, pork, and chicken from the COOL statute. COOL for other covered commodities would remain in place. On May 20, 2015, the House Agriculture Committee marked up H.R. 2393 and, by a vote of 38-6, favorably reported it to the full House. On June 10, 2015, the House passed H.R. 2393 by a vote of 300 to 131.

During the House Committee on Rules hearing on H.R. 2393, Representative Massie (KY) submitted an amendment that would have established a voluntary country-of-origin labeling law to replace a repealed mandatory law for beef, pork, and chicken.⁸⁸ The amendment would have allowed meat to be labeled "Product of US" if the livestock from which it is processed is exclusively born, raised, and slaughtered in the United States. The amendment was not considered by the Rules Committee.

Support for COOL repeal has been less certain in the Senate. Senator Roberts, Chairman of the Senate Agriculture Committee, has noted that the views of Agriculture Committee members vary on COOL and that they are considering alternatives that would enable the United States to meet its WTO obligations.⁸⁹

On July 23, 2015, Senator Hoeven introduced the Voluntary Country of Origin Labeling (COOL) and Trade Enhancement Act of 2015 (S. 1844), which also repeals mandatory COOL for beef, pork, chicken, and their ground products. In addition, S. 1844 amends the Agricultural Marketing Act (7 U.S.C. §1621 et seq.) requiring USDA to establish a label designation that enables meat processors to voluntarily use a U.S. label for beef, pork, and chicken from livestock exclusively born, raised, and slaughtered in the United States.

Also, during debate on the vehicle for the Senate surface transportation reauthorization bill (H.R. 22), Senator Roberts introduced an amendment (S.Amdt. 2302) to repeal mandatory COOL for beef, pork, and chicken using language from H.R. 2393. On July 26, 2015, Senator Hoeven also introduced S. 1844 as an amendment (S.Amdt. 2371) to the transportation bill. Neither amendment was considered for inclusion in the final Senate-passed bill. The Senate is expected to take up COOL repeal legislation after the August recess.

Supporters of S. 1844 believe that a voluntary program would successfully address the WTO case by fully repealing mandatory COOL, provide integrity to the U.S. label for meat, and enable consumers to know about the origin of some of their meat purchases. Supporters also note that Canada already has a similar program in place for meat.⁹⁰

Canada and Mexico have stated that the only way to resolve the WTO case is to repeal COOL. In response to Senator Hoeven's proposed voluntary program, Canada's Agriculture Minister said such a program would "guarantee Canadian retaliation" because it would continue to discriminate against imported livestock through segregation.⁹¹

If a voluntary COOL program was implemented, and Canada or Mexico opposed it, the United States could request that a WTO compliance panel determine if the new program is compliant with WTO requirements. However, once the arbitration panel determines the amount applicable in the ongoing case, Canada and Mexico could implement retaliation even if mandatory COOL is repealed and is replaced with a voluntary program. U.S. products would face higher tariffs while the compliance panel reviews the new voluntary program.

COOL was addressed in the explanatory statement accompanying the Consolidated and Further Continuing Appropriations Act, 2015 (P.L. 113-235, Division A, December 16, 2014). In the statement, Congress directed USDA, in consultation with the U.S. Trade Representative, to submit to the House and Senate Appropriations Committees a report with recommendations on how to change the COOL law to make certain it "does not conflict with or is in any manner inconsistent with" U.S. WTO obligations. The report is due to the committees within 15 days of final resolution (assumed to mean when the WTO issues an appellate ruling on the COOL compliance report) or May 1, 2015, whichever comes first. Secretary Vilsack has repeated his comments from November stating that there is no "regulatory fix" for COOL and maintains that Congress has to "fix" the law.

For FY2014, in the explanatory statement for the Consolidated Appropriations Act, 2014 (P.L. 113-76) the House Committee on Appropriations expressed disapproval of USDA's May 2013 COOL rule, pointing to its high costs to the livestock industry and the potential of retaliation in the WTO case. The committee recommended that USDA delay implementing the COOL rule until the WTO case is completed.⁹² On January 23, 2014, Representative DeLauro, a member of the House Committee on Appropriations, sent a letter to Secretary Vilsack urging that USDA continue to implement and enforce COOL regulations.⁹³

On December 18, 2015, mandatory COOL for muscle cuts of beef and pork and ground beef and pork were repealed in Section 759 of the enacted Consolidated Appropriations Act, 2016 (P.L. 114-113, Division A). The provision removed all references to beef and pork in the COOL statute (7 U.S.C. §1638 et seq.).

In the 113^th Congress, House and Senate conferees completed work on the farm bill without making any major changes to COOL's statutory language.

Earlier, in May 2013, during the Senate Agriculture Committee markup of the Senate farm bill (S. 954), Senator Mike Johanns offered and then withdrew an amendment to repeal COOL for beef, lamb, and pork. Senator Johanns noted that he believed the rule USDA had proposed to address the WTO findings would be a regulatory nightmare and would not satisfy the U.S. WTO obligations. But instead of asking for a roll call vote on the amendment, he withdrew it in recognition that the committee's opinion on COOL was divided. S. 954, the Senate-passed farm bill, contains no provisions on COOL.

The House-passed farm bill (H.R. 2642, passed July 11, 2013) contained a provision (Section 11105) that would have required USDA to conduct an economic analysis of USDA's March 2013 proposed COOL rule (78 Federal Register 15645). The analysis was to include the impact on consumers, producers, and packers of the COOL law and rule. The report on COOL would have been due to Congress within 180 days of farm bill enactment. During the first farm bill conference meeting on October 30, 2013, several conferees from both the House and Senate raised concerns about the COOL rules. While the farm bill conference leaders worked, reports speculated that conferees would repeal the COOL law or perhaps modify it.⁹⁴ COOL opponents encouraged conferees to find a WTO-compliant resolution to the WTO COOL dispute.⁹⁵ Reportedly, one proposal considered called for a "North American" meat label, which COOL proponents strongly oppose.⁹⁶ USDA's Secretary Vilsack weighed in on COOL with the view that Congress should let the WTO process resolve the issue.⁹⁷

The farm bill conference report to H.R. 2642, released on January 27, 2014, did not contain any language or provision to repeal or modify the COOL law. The only COOL-pertinent provision (Section 12104) includes the economic analysis provision found in the House-passed farm bill. The conference report clarifies that the economic analysis is to be of the May 2013 final rule (78 Federal Register 31367) instead of the March 2013 proposed rule. In addition, the COOL provision adds venison as a covered commodity. In a letter to conference leadership, COOL opponents expressed their disappointment that conferees did not alter COOL in a way that would resolve the WTO COOL dispute.⁹⁸

The COOL provisions of the 2002 and 2008 farm bills⁹⁹ do not change the requirements of the Tariff Act or the food safety inspection statutes described below. Instead, they were incorporated into the Agricultural Marketing Act of 1946 (Sections 281-285).

Tariff Act

Under Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), every imported item must be conspicuously and indelibly marked in English to indicate to the "ultimate purchaser" its country of origin. The U.S. Customs and Border Protection generally defines the "ultimate purchaser" as the last U.S. person to receive the article in the form in which it was imported. So, articles arriving at the U.S. border in retail-ready packages—including food products, such as a can of Danish ham, or a bottle of Italian olive oil—must carry such a mark. However, if the article is destined for a U.S. processor where it will undergo "substantial transformation," the processor is considered the ultimate purchaser. Over the years, numerous technical rulings by Customs have determined what is, or is not, considered "substantial transformation," depending upon the item in question.

The law has authorized exceptions to labeling requirements, including articles on a so-called "J List," named for Section 1304(a)(3)(J) of the statute. This empowered the Secretary of the Treasury to exempt classes of items that were "imported in substantial quantities during the five-year period immediately preceding January 1, 1937, and were not required during such period to be marked to indicate their origin." Among the items placed on the J List were specified agricultural products including "natural products, such as vegetables, fruits, nuts, berries, and live or dead animals, fish and birds; all the foregoing which are in their natural state or not advanced in any manner further than is necessary for their safe transportation."¹⁰⁰ Although J List items themselves have been exempt from the labeling requirements, Section 304 of the 1930 act has required that their "immediate container" (essentially, the box they came in) have country-of-origin labels. But, for example, when Mexican tomatoes or Chilean grapes were sold unpackaged at retail in a store bin, country labeling had not been required by the Tariff Act.

Meat and Poultry Products Inspection Acts

USDA's Food Safety and Inspection Service (FSIS) is required to ensure the safety and proper labeling of most meat and poultry products, including imports, under the Federal Meat Inspection Act, as amended (21 U.S.C. §601 et seq.), and the Poultry Products Inspection Act, as amended (21 U.S.C. §451 et seq.). Regulations issued under these laws have required that country of origin appear in English on immediate containers of all meat and poultry products entering the United States (9 C.F.R. §327.14 and 9 C.F.R. §381.205). Only plants in countries certified by USDA to have inspection systems equivalent to those of the United States are eligible to export products to the United States.

All individual, retail-ready packages of imported meat products (for example, canned hams or packages of salami) have had to carry such labeling. Imported bulk products, such as carcasses, carcass parts, or large containers of meat or poultry destined for U.S. plants for further processing also have had to bear country-of-origin marks. However, once these non-retail items have entered the country, the federal meat inspection law has deemed them to be domestic products. When they are further processed in a domestic, FSIS-inspected meat or poultry establishment—which has been considered the ultimate purchaser for purposes of country-of-origin labeling—FSIS no longer requires such labeling on either the new product or its container. FSIS has considered even minimal processing, such as cutting a larger piece of meat into smaller pieces or grinding it for hamburger, enough of a transformation so that country markings are no longer necessary.

Meat and poultry product imports must comply not only with the meat and poultry inspection laws and rules but also with Tariff Act labeling regulations. Because Customs generally requires that imports undergo more extensive changes (i.e., "substantial transformation") than required by USDA to avoid the need for labeling, a potential for conflict has existed between the two requirements.

Federal Food, Drug, and Cosmetic Act

Foods other than meat and poultry are regulated by the U.S. Department of Health and Human Services' Food and Drug Administration, primarily under the Federal Food, Drug, and Cosmetic Act (FFDCA; 21 U.S.C. §301 et seq.). This act does not expressly require COOL for foods. Section 403(e) of the FFDCA does regard a packaged food to be misbranded if it lacks a label containing the name and place of business of the manufacturer, packer, or distributor (among other ways a food can be misbranded). However, this name and place of business is not an indicator of the origin of the product itself.

Overview

After COOL took full effect in March 2009, Canada and Mexico continued to question the trade legality of mandatory COOL, and claimed that COOL disrupted normal live cattle and hog trade patterns and caused large financial losses to their livestock industries. Canada and Mexico were concerned that labeling requirements and the need to segregate imported and domestic animals to assure proper labeling would raise the cost of handling and processing imported animals. The increased cost would ultimately lead U.S. livestock buyers to reduce live animal imports or to offer lower prices for imported animals.

The cattle and hog industries of Canada, Mexico, and the United States have become increasingly integrated over the last two decades, particularly after NAFTA took effect in 1994 and, before that, the Canada-U.S. Free Trade Agreement in 1988. These agreements, along with the global Uruguay Round Agreements under the WTO that reduced tariff and non-tariff barriers to trade, have enabled animals and animal products to move across borders more freely, based on market demand.

A number of animal health incidents have disrupted this market integration from time to time. The most significant event was the discovery of bovine spongiform encephalopathy (BSE or mad cow disease) in 2003, first in Canada and later in the United States, which halted most cross-border movement of cattle from Canada to the United States from mid-2003 through mid-2005. The predominance of BSE cases in Canada rather than in the United States may have contributed to wider support for the mandatory COOL law, some analysts believe, although government officials assert that both countries now have strong, scientifically defensible safeguards in place to ensure that BSE is controlled and that its infectious agent does not enter the human food supply.

Proximity, abundant feed supplies, and established feeding operations in the United States have resulted in an increase in live cattle and hog imports from Canada and Mexico. Imports may fluctuate year to year as factors such as relative animal and feed prices, inventory levels, currency exchange rates, and weather conditions influence the movement of cattle and hogs into the United States.

Value of North American Livestock Trade

U.S. Exports ($ million)

2010

2011

2012

2013

2014

Cattle

Canada

19.7

42.3

31.5

24.8

22.5

Mexico

30.8

20.8

8.1

49.4

50.6

Rest of World

82.3

315.3

362.8

205.9

79.9

Total Cattle

132.7

378.4

402.4

280.0

149.9

Hogs

Canada

1.6

2.1

1.7

1.0

1.4

Mexico

2.0

2.9

6.4

2.8

1.9

Rest of World

5.0

19.1

25.2

26.7

9.5

Total Hogs

8.6

24.1

33.4

30.5

12.7

Total Cattle & Hogs

141.3

402.5

435.8

310.6

162.6

U.S. Imports ($ million)

2010

2011

2012

2013

2014

Cattle

Canada

1,082.2

862.3

1,060.1

1,268.7

1,753.3

Mexico

522.8

616.9

716.6

508.4

738.7

Rest of World

0.0

0.0

0.0

0.0

0.0

Total Cattle

1,605.0

1,479.1

1,776.6

1,777.1

2,492.0

Hogs

Canada

363.3

362.9

330.5

333.9

433.9

Mexico

0.0

0.0

0.0

0.0

0.0

Rest of World

0.2

0.0

0.0

0.0

0.1

Total Hogs

363.5

362.9

330.6

333.9

434.0

Total Cattle & Hogs

1,968.5

1,842.2

2,107.2

2,111.0

2,926.0

U.S. Cattle Imports

Source: USDA, FAS, GATS.

U.S. cattle imports during the first half of 2008 were almost 9% higher than the previous year, but import growth slowed during the second half of 2008, and by December cattle imports had fallen 8% below 2007. Imports from Canada continued to grow during 2008 and imports of Canadian feeder cattle were particularly strong in the first half of the year. Under COOL regulations, cattle that were in the United States before July 15, 2008, were considered U.S. origin cattle, which likely encouraged feeder imports from Canada during the first part of the year. Canadian feeder imports through June 2008 were 72% higher than the previous year, but ended the year only 16% higher. However, during 2008 cattle imports from Mexico were 35% lower than 2007, and the lowest imports since 1998. Good range and forage conditions in Mexico likely allowed producers to keep cattle on grass and resulted in reduced U.S. imports.

In 2009, U.S. cattle imports continued to decline, dropping 12%. But contrary to 2008, imports from Canada fell, while imports from Mexico increased. USDA's Economic Research Service (ERS) indicated that weaker U.S. cattle prices and weaker demand for beef in the United States, combined with a stronger Canadian dollar, reduced Canadian returns and incentives to send cattle to the United States.¹⁰¹ On the other hand, imports from Mexico started rising due to worsening drought conditions in Mexico during the latter part of 2009 that encouraged Mexican producers to ship cattle to the United States.

Some analyses attribute the import decline during the last part of 2008 and all of 2009 to COOL, but differ on the extent currency exchange rates may have contributed to this development. CattleFax, an industry-funded data and analysis service based in Colorado, observed that the 2008 decline in cattle imports was due to mandatory COOL regulations, and that imports would "face a big wild card in 2009" for the same reason.¹⁰² Livestock sector analysts with the Chicago Mercantile Exchange (CME), examining cattle import trends through year-end 2008, commented that the COOL law "has been quite effective, if you measure effectiveness by the degree to which it has been able to stifle cattle trade in North America." They wrote that reductions in imports from both Mexico and Canada "came at a time when a significant devaluation in the value of the Peso and Canadian dollar normally would have been conducive of increased imports from these two countries. Under normal circumstances, one would expect cattle imports to actually increase rather than be cut by almost 40%."¹⁰³ However, USDA's ERS suggested that the currency exchange factor may be somewhat more involved and that Canada's available supplies of slaughter cattle were reduced by earlier strong shipments of feeder cattle.¹⁰⁴

Since 2009, U.S. cattle imports have been in the 2.1 million-2.4 million head range. In 2014, cattle imports increased 16% to nearly 2.4 million head, the highest level of imports since 2007. Imports from Canada were 19% higher and from Mexico 13% higher. Record high U.S. cattle prices provided ample incentive to pull Canadian and Mexican cattle into the United States.

Cattle Imports from Canada

Source: USDA, FAS, GATS.

In 2014, slaughter cattle imports from Canada increased 7% to 724,000 head from the previous year. Increases in slaughter cattle imports have been supported by larger shipments of cows coming into the United States for immediate slaughter. High U.S. cow prices and the closure of a cow slaughter plant in Quebec in 2012 have contributed to increases in slaughter cow imports. Feeder cattle imports increased 38% to 493,000 head. The share of feeder cattle imports—40% in 2014—has been steadily rising over the last several years. Record high U.S. feeder cattle prices supported the southern movement of Canadian feeders.

Cattle Imports from Mexico

Reduced cattle inventory and improved pasture conditions in Mexico in 2013 resulted in a decline of 33% in feeder cattle shipments to the United States. In 2014, imports from Mexico increased 13% as the record high feeder cattle prices encouraged Mexico's cattle producers to send more animals to the United States.

Source: USDA, FAS, GATS.

U.S. Hog Imports

U.S. hog imports from Canada started to rise sharply in the mid-1990s. U.S. hog imports were a record 10 million head in 2007, growing more than 13% per year on average during the previous 10 years. Furthermore, the composition of U.S. hog imports significantly shifted from hogs for immediate slaughter to feeder pigs.¹⁰⁶ At one time the U.S. hog industry was composed of many small operations that raised hogs from birth to slaughter-ready weight (farrow-to-finish operations), but from the mid-1980s the hog industry moved toward vertical integration. With vertical integration there came increased demand for feeder pigs to meet the needs of finishing operations. Some Canadian producers focused their production on providing feeder pigs for shipment to the United States where access to abundant and cheaper supplies of grain made it more economical to feed pigs to slaughter weight.¹⁰⁷ The feeder pig share of hog imports increased steadily from the mid-1990s, peaking at 85% in 2012. The feeder pig share of imports was 83% in 2014.

Source: USDA, FAS, GATS.

An early 2009 USDA analysis suggested that COOL's implementation likely "made U.S. swine finishers reluctant to import Canadian finishing animals, in light of some major U.S. packers' stated unwillingness to process Canadian-origin animals."¹⁰⁸ Another report suggested that COOL was affecting the U.S. hog sector, particularly in Iowa, as packers moved to process only U.S.-born hogs. With many Iowa producers operating finishing operations that source feeder pigs from Canada, a USDA document on COOL implementation cited that some producers' barns are "empty because of a lack of an assured outlet for slaughter hogs of mixed country of origin" (i.e., Product of Canada and United States). USDA also reported that some lenders were not extending credit to operations that finish mixed-origin pigs, and that lower prices at times were "being paid for mixed origin slaughter hogs compared to hogs of exclusively U.S. origin."¹⁰⁹

After the sharp decline in 2009, U.S. hog imports were stable at about 5.7 million-5.8 million head for 2010-2012. In 2013, hog imports declined 12% to about 5 million head, and remained at that level in 2014. Canadian hog inventories have declined from the mid-2000s level resulting in tighter hog supplies available for export to the United States. However, as with the cattle markets, record high hog prices in 2014 encouraged feeder pig imports.

The key WTO findings that U.S. COOL regulations violated U.S. WTO obligations centered on Article 2.1 and Article 2.2 of the Technical Barriers to Trade (TBT) agreement.¹¹⁰ Article 2.1 states that "Members shall ensure that... products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin.... " Article 2.2 states that "technical regulations [such as COOL] shall not be more trade-restrictive than necessary to fulfil a legitimate objective."

This section summarizes key WTO findings of the dispute settlement panel, the Appellate Body, the compliance panel, and the Appellate Body on the compliance panel. The first two sections describe the key rulings on Articles 2.1 and 2.2 of the Technical Barriers to Trade (TBT). The last two sections summarize issues that were before the dispute settlement panel, but were not key in the appeal and compliance processes.

The DS panel found that Canada and Mexico demonstrated that COOL is a technical regulation governed by, and in violation of, Article 2.1 of the TBT. The AB upheld this finding, but for different reasons (see below). This TBT article states: "Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country." The panel first found that the COOL statute and the final rule (but not the Vilsack letter) are a "technical regulation" because they are legally enforceable requirements governing the labeling of meat products offered for sale.¹¹¹ The panel further found that Canadian and U.S. cattle, Canadian and U.S. hogs, and Mexican and U.S. cattle are "like products," and the muscle cut labels used to implement COOL affect competitive conditions for these products in the U.S. market to the detriment of imported livestock. According to the panel, COOL creates this "competitive advantage" by creating an incentive for "processing exclusively domestic livestock and a disincentive against handling imported livestock." More specifically, the panel found that to comply with COOL, processors need to segregate imported from domestic livestock to an extent that discourages them from using imported livestock at all. In turn, this reduces the competitive opportunities for imported livestock relative to those for domestic livestock.

The panel then examined what is involved in segregating livestock and meat between domestic and foreign origin under five business scenarios. It determined that "the least costly way" to comply with COOL "is to rely on exclusively domestic livestock" rather than imported livestock. Accepting evidence provided by Canada and Mexico that major U.S. slaughterhouses are "applying a considerable COOL discount of [US$] 40-60 per head for imported livestock" but not to domestic livestock, the panel observed that COOL creates an incentive to process domestic rather than imported livestock because it is less costly to do so. It pointed out that several U.S. meat processors indicated they plan to move to use Category A (U.S. origin) "for the vast majority of their beef and pork products" and to ensure segregation by origin (i.e., minimize commingling). Other evidence presented confirmed that the U.S.-origin label accounts for a large share of the meat marketed. The United States indicated that 71% of the beef, and 70% of the pork, sold at the retail level carries the exclusive U.S. label. Canada showed that close to 90% of meat sold at retail carries this U.S. label.

Based on the above, the panel "preliminarily" concluded that COOL "creates an incentive to use domestic livestock—and a disincentive to handle imported livestock—by imposing higher segregation costs on imported livestock than on domestic livestock." The panel's report also showed that some U.S. plants and companies "are simply refusing to process any imported livestock anymore," and that fewer U.S. processing plants are accepting cattle and hog imports than before. It also noted that certain suppliers had to transport imported livestock longer distances than before COOL, and that they also faced logistical problems and additional costs for timing delivery to specific times or days when processing is scheduled. Although the panel took these into account, it decided it also was important to make findings on COOL's actual trade effects. To do this, it considered data, economic analyses, and econometric studies submitted by Canada, Mexico, and the United States.

In reviewing two economic studies on COOL's livestock segregation costs submitted by Canada, the panel stated "both studies shed some light on the different types of segregation and compliance costs encountered at different stages of the supply chain." Noting that such costs need to be absorbed somewhere in the marketing system, it concluded that "economic competition pressure" will dictate how these costs are allocated. Whether this involves processing only U.S.-origin livestock because it is the cheapest way to comply with COOL and because many U.S. consumers are not willing to pay a price premium for country-of-origin labeling, or incurring the additional costs associated with segregating imported livestock before processing, either option "is likely to cause a decrease in the volume and price of imported livestock."

The panel also reviewed econometric analyses¹¹² submitted by Canada and the United States that purported to assess COOL's impacts on prices and shares of imported livestock. Whereas the Canadian study concluded that COOL caused reduced competitive opportunities for Canadian livestock in the U.S. market, the U.S. study concluded that the economic recession was the primary cause. Rather than seeking to reconcile these disparate conclusions, the panel instead assessed "the robustness of each study." It considered Canada's study to be "sufficiently robust" because it included other economic variables that confirmed that COOL—not the economic recession that began in 2008, the 2004-2005 U.S. import ban due to the discovery of BSE in Canada's cattle herds, or transport costs—"had a negative and significant impact on Canadian import shares and price basis." Conversely, the panel found the U.S. study did not sufficiently show that the economic recession rather than COOL accounted for the negative impacts experienced in the cattle sector, did not fully analyze what occurred in both countries' hog sectors, and thus did not refute what Canada's study laid out.

The United States appealed the DS panel's finding that COOL treats imported livestock less favorably than domestic livestock (i.e., that COOL is inconsistent with TBT's Article 2.1). Its main argument was that COOL did not change the "conditions of competition" to the detriment of Canadian and Mexican cattle and hog producers. The U.S. legal brief acknowledged that though private market participants incur costs in complying with COOL, "any country of origin labeling will necessarily introduce compliance costs" and governments cannot control how participants respond to these costs. The brief argued that market forces, rather than the COOL measure in and of itself, increased the cost of selling Canadian and Mexican livestock into the U.S. market, and that COOL cannot be faulted for being discriminatory.¹¹³

In reviewing the U.S. appeal, the Appellate Body found that the panel's analysis of the finding of unfavorable treatment was incomplete in not considering whether or not the detrimental impact on imports was due exclusively to a "legitimate regulatory distinction" (i.e., a legally valid reason for similar products to be treated differently), which the TBT allows. The AB found that the COOL measure:

lacks even-handedness because its recordkeeping and verification requirements impose a disproportionate burden on upstream producers and processors of livestock as compared to the information conveyed to consumers through the mandatory labelling requirements for meat sold at the retail level. That is, although a large amount of information must be tracked and transmitted by upstream producers for purposes of providing consumers with information on origin, only a small amount of this information is actually communicated to consumers in an understandable or accurate manner, including because a considerable proportion of meat sold in the United States is not subject to the COOL measure's labelling requirements at all.¹¹⁴

Based on these findings, the AB concluded that COOL's "regulatory distinctions" (i.e., the prescribed labels and labeling exemptions) "amount to arbitrary and unjustifiable discrimination against imported livestock, such that they cannot be said to be applied in an even-handed manner," rather than being based upon a "legitimate regulatory distinction." It thus upheld the DS panel's finding, but for different reasons, that COOL's requirements on labeling beef and pork accord "less favorable treatment to imported livestock than to domestic livestock."

The compliance panel found that the revised (May 2013) COOL rule violated Article 2.1 of the TBT. Like the dispute panel and the Appellate Body, the panel found that the revised rule was a technical regulation and that Canadian and Mexican cattle and hogs were like products. The compliance panel determined that the revised COOL rule required increased segregation and recordkeeping due to the ban on commingling and raises the possibility of needing more labels compared with the original rule, both of which increase the disincentive to use imported livestock. Therefore, it was found that the revised rule afforded less favorable treatment to imported livestock. The panel found that less favorable treatment was not due exclusively to a legitimate regulatory distinction—the need to inform consumers where livestock was born, raised, and slaughtered—because there still existed the possibility of inaccurate label information and a large amount of beef and pork was still exempt under the revised COOL rule. The compliance panel concluded that

The Appellate Body upheld the findings of the compliance panel report that COOL violated Article 2.1 through increased recordkeeping and verification requirements that burden imported livestock. The panel found that the legitimacy for COOL is undermined because a large amount of beef and pork is exempt under COOL, placing imported livestock at a competitive disadvantage to domestic livestock for no reason. The panel notes between 57.7% and 66.7% of beef and 83.5% and 84.1% of pork do not provide origin information to consumers.

Canada and Mexico also alleged that COOL violates Article 2.2 of the TBT by being more trade-restrictive than necessary to fulfill a legitimate policy objective. Article 2.2 reads:

Members shall ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfillment would create. Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment. In assessing such risks, relevant elements of consideration are, inter alia: available scientific and technical information, related processing technology or intended end-uses of products. (italics added for emphasis)

The panel accepted the U.S. position that COOL's objective is to inform consumers of the country of origin of meat products,¹¹⁶ and it agreed with the United States that this is a "legitimate" policy objective under TBT's Article 2.2 to pursue. However, it concluded that COOL's implementation is more trade restrictive than is necessary to fulfill its objective because it does not meaningfully inform consumers about the countries of origin of meat products.

The United States appealed the DS panel's finding that COOL does not meet the objective of providing consumers with meaningful information on the origin of meats. It challenged the two-step approach the panel followed to determine whether COOL is consistent with TBT's Article 2.2. Its brief pointed out that the panel first looked at whether COOL fulfills a legitimate policy objective, and if it had been found to do so, would have examined whether COOL is more trade-restrictive than necessary compared to other possible less trade-restrictive measures that could have just as well met the policy objective. The United States argued that the panel took the wrong approach and instead should have focused only on whether COOL is more trade-restrictive than necessary. It argued that the panel went beyond the scope of Article 2.2 to make an "intrusive and far-ranging judgment" on whether COOL "is effective public policy."

In its analysis, the Appellate Body found that the DS panel erred in interpreting and applying Article 2.2. Although it agreed with the panel that COOL's objective is to provide consumers with information on origin and that this is a legitimate objective, the AB viewed the panel's finding as too narrow. The AB found that the panel

appeared to have considered, incorrectly, that a measure could be consistent with Article 2.2 only if it fulfilled its objective completely or exceeded some minimum level of fulfilment, and to have ignored its own findings, which demonstrated that the COOL measure does contribute, at least to some extent, to achieving its objective.

The AB reversed the panel's finding that COOL is inconsistent with Article 2.2, but was not able to determine whether COOL is more trade-restrictive than necessary to meet the TBT requirement that it be a legitimate objective.¹¹⁷

The compliance panel agreed with the dispute panel and Appellate Body that COOL is a legitimate objective providing U.S. consumers information on the country of origin of beef and pork. The panel found that the revised COOL rule contributes more than the original rule to the objective of providing origin information to consumers, but still exempted large portions of beef and pork from labeling. The panel also found that the revised rule increased trade restrictiveness compared with the original rule, but could not determine if the revised rule was more trade restrictive than necessary. To determine if the revised rule was more trade restrictive than necessary, the panel examined the risks of not fulfilling the objective of COOL and examined four alternative labeling schemes,¹¹⁸ provided by Canada and Mexico, that would demonstrate that the revised COOL rule was more trade restrictive than necessary. The panel could not determine the gravity of not fulfilling the legitimate objective, and found shortcomings in each alternative. The compliance panel found that Canada and Mexico had not made a prima facie case that the revised COOL rule was more trade restrictive than necessary, thus violating Article 2.2 of the TBT.

The Appellate Body overturned the compliance panel's conclusion that Canada and Mexico did not make a prima facie case that COOL was more trade restrictive than necessary. However, like the compliance panel, the Appellate Body found there are not enough undisputed facts in the record to complete the legal analysis on whether or not COOL violated Article 2.2.

The DS panel determined that, unlike the muscle cut labels, the ground meat labels were consistent with Article 2.1 of the TBT. It found that the 60-day "inventory allowance" gives significant flexibility to processors (e.g., beef grinders) in labeling country of origin. This rule is based on the statutory requirement that ground meat labels list all actual or "reasonably possible" countries of origin. In practice, the rule allows a processor to use the same label for all of its ground meat so long as the label lists all countries of origin of the meat in the processor's inventory for the last 60 days. Moreover, the 60-day "inventory allowance" flexibility is available not only for meat processors, but for market participants at every stage of meat supply and distribution. The panel determined that, contrary to Canada and Mexico's assertions, the rule's flexibility "limits any additional costs of implementing" the ground meat labeling requirements. It noted that Canada and Mexico did not present any evidence that, despite this flexibility, compliance with COOL for ground meat affected imported livestock less favorably than domestic livestock.

Canada and Mexico did not appeal the DS panel's finding to the AB.

Although the panel recognized that the Vilsack letter is not a technical regulation within the scope of the TBT Agreement, the panel agreed with Canada and Mexico that the Vilsack letter constitutes "unreasonable administration" of COOL and thus violates Article X:3(a) of GATT 1994 (see "Vilsack Letter" for details). This article states that "[e]ach contracting party shall administer in a uniform, impartial and reasonable manner all its laws, regulations, decisions and rulings ..." Specifically, the panel found that the letter is an unreasonable act of administering COOL because (1) it could not find any "justifiable rationale" for simultaneously permitting the final rule to enter into force and suggesting stricter practices than the ones the rule requires, (2) the language of the letter may have caused uncertainty and confusion as to its force and effect, and (3) its timing relative to the final rule's entry into force may have caused confusion about whether processors should comply with the final rule or the Vilsack letter. The letter, it wrote, did not meet the minimum standards for transparency and procedural fairness in the administration of trade regulations.

The United States did not appeal this finding. Canada, in its appeal, requested that the AB make certain rulings on the Vilsack letter. Subsequently, Canada stated that it no longer sought a finding on this matter because the United States asserted that this measure had been withdrawn on April 5, 2012.

With the WTO arbitrator establishing May 23, 2013, as the deadline for the United States to comply with the findings of the dispute settlement (DS) panel and Appellate Body (AB) reports, the case moved to the compliance stage. The WTO found that the COOL regulations treated imported livestock in an unfavorable manner by altering the conditions of competition in a way that favored domestic livestock over imported livestock. The United States has said it will bring COOL into compliance with its WTO obligations.¹¹⁹ Stakeholders have two views about how the United States should comply with the WTO findings. One is to amend the COOL legislation; the other is to change the COOL regulations to bring the United States into compliance.

Legislative Approach

Some U.S. stakeholders have argued that, for the United States to comply with the WTO findings, the COOL law would have to be changed, because the law requires that meat derived from foreign-born, or foreign-born and -raised, animals has to have a different label than meat from animals born, raised, and slaughtered in the United States.¹²⁰ The National Cattlemen's Beef Association (NCBA), the National Pork Producers Council (NPPC), the American Meat Institute (AMI), and the Food Marketing Institute (FMI) have opposed mandatory COOL from its inception. They have advocated that Congress change the law to enable the United States to meet its WTO obligations, and warn that retaliation by Canada and Mexico will harm U.S. livestock and meat markets.¹²¹

These industry groups point to research conducted by Kansas State University, which found that consumers valued meat with a "Product of North America" label about the same as meat with a "Product of the United States" label.¹²² A "Product of North America" label could apply to any meat from imported livestock from Canada and Mexico that is substantially altered through slaughtering and processing in a U.S. meatpacking plant. A single label for meat that is from any animal slaughtered in the United States could eliminate the extra cost associated with segregating and recordkeeping for imported livestock, thus ending discriminatory pricing of imported livestock. Some in the meat industry argue that the "Product of the United States" label should apply to any meat being processed in a U.S. meatpacking plant.¹²³ This approach would require a change in the COOL legislation.

Canadian stakeholders have consistently contended that a change in legislation will be required. According to the Canadian Pork Council (CPC):

for the U.S. to come into compliance with the WTO ruling will require legislative action to eliminate the conditions that give rise to the discrimination against live animals born outside of the U.S.—the discrimination arising from the requirement of COOL that there be different labels for animals processed in a U.S. plant (that are) born, raised and slaughtered in the U.S. from those not born raised and slaughtered in the U.S. Those labeling requirements are explicit in the legislation; thus, a legislative or statutory change will be needed.

A representative from the Canadian Cattlemen Association (CCA) agreed with the CPC assessment. In the view of the CPC and CCA, mandatory COOL labels are acceptable, but the law would have to be amended to require that all meat processed from imported livestock in a U.S. meatpacking plant be labeled the same as meat processed from domestic livestock.¹²⁴

During the WTO arbitration process over the compliance timeline, Canada expressed the view that a regulatory change is unlikely to bring the United States into compliance and that a legislative change could be necessary.¹²⁵ In presenting their arguments for quicker compliance, Canada and Mexico argued that the United States had adequate time to take a legislative approach to compliance, especially because the ongoing 2012 farm bill debate would have provided a legislative vehicle for addressing COOL. Some U.S. stakeholders also have suggested that the farm bill would be an appropriate vehicle to legislatively comply with WTO obligations.¹²⁶ Taking advantage of the placeholder provision inserted into the House-passed farm bill (Section 11105 of H.R. 2642), COOL was one of the outstanding issues placed on the agenda of farm bill conferees. The conference agreement sent to the floor did not include any major changes to COOL (see "Congressional Action on COOL").

Regulatory Approach

Other stakeholders advocated that USDA rework the COOL regulations to bring the United States into compliance with the WTO ruling. Reportedly, at the beginning of 2012, USTR considered but did not follow through with making changes to COOL regulations. The change would have allowed for more flexibility for commingling imported and domestic cattle and using a multi-country label. This approach was dropped as supporters of COOL believed such a change would undermine the COOL law. Others argued that the change would not go far enough.¹²⁷

Interest Group Support for Regulatory Fix

In August 2012, the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF) sent a letter to Secretary Vilsack and U.S. Trade Representative Kirk that proposed regulatory changes to simplify the recordkeeping requirements of COOL.¹²⁸ Because U.S. animal health regulations¹²⁹ require that imported cattle have a foreign mark and that cattle imported for immediate slaughter be shipped in sealed conveyances to slaughter plants, R-CALF proposed that any cattle arriving at a slaughter plant without a mark or seal be considered U.S. cattle. The WTO found that more information was collected on imported cattle compared with what was passed on to consumers on labels. According to R-CALF, its proposed presumption for U.S. cattle would reduce additional documentation and recordkeeping for imported cattle. Currently, hogs are exempt from a country-of-origin mark under the Tariff Act of 1930.¹³⁰ R-CALF suggested that this livestock exemption be removed, thus requiring a country-of-origin mark on hogs. Once the exemption is lifted, the presumption of domestic hogs would become workable.

On February 4, 2013, the National Farmers Union (NFU) and the United States Cattlemen's Association (USCA) released an analysis of proposed options to bring COOL into WTO compliance.¹³¹ This analysis laid out their case for how the United States could comply with its WTO obligations if USDA required more information to be added to labels about where cattle were born, raised, and slaughtered. The proposal also called for USDA to halt the commingling of meat from animals of different origin. For minimally processed products, such as smoked, cured, or cooked products, which are exempt from labeling, USDA could revise the regulations to require that these products be labeled. The proposal also suggested that COOL should be extended to food service, which the COOL statute currently exempts. The proposal noted this would require a change in law and could not be accomplished through a change in regulations.

Congressional Support for a Regulatory Fix

Some Members of Congress have expressed the view that USDA and USTR should bring the United States into WTO compliance through regulatory means. In a January 31, 2013, letter to the Secretary of Agriculture and the U.S. Trade Representative, 31 Senators asked that USDA and USTR find a regulatory solution.¹³² The Senators asked that a regulatory fix make the COOL regulations consistent with WTO rules, provide accurate origin information for all meat cuts to consumers, engage industry stakeholders in the rulemaking process, and keep Congress informed.

On July 8, 2013, a group of eight meat industry organizations, led by the American Meat Institute (AMI), filed a lawsuit in the U.S. District Court for the District of Columbia to block USDA's revised COOL rule.¹³³ The plaintiffs challenged the COOL rule for three reasons. They contend first, that COOL violates the U.S. Constitution because it compels speech in the form of a label that does not advance a government interest; second, that the rule violates the COOL statute, which does not allow for detailed labels; and third, that the rule is arbitrary and capricious, violating the Administrative Procedure Act, because it is burdensome for industry but provides little or no benefit to consumers.

According to the plaintiffs, USDA's final rule is more complex and discriminatory against foreign meat and livestock than the previous rule because stricter segregation will be necessary to meet the requirements. They say that the rule would be particularly onerous for U.S. meat processors that are located near the border of Mexico or Canada who often use imported livestock. Furthermore, the plaintiffs do not believe the rule will meet U.S. WTO obligations.¹³⁴

The National Farmers Union, which supports COOL, characterized the lawsuit as a tactic to delay the implementation of a stronger COOL rule by groups that do not support COOL.¹³⁵ In response to the lawsuit, R-CALF started a petition requesting that USDA stop NCBA, one of the plaintiffs in the lawsuit, from receiving mandated beef checkoff funds. R-CALF claims that it is a conflict of interest for NCBA to receive those funds while suing USDA to halt the implementation of the popular COOL program that provides U.S. consumers information about the source of their beef.¹³⁶

On July 25, 2013, the plaintiffs requested that the U.S. District Court for the District of Columbia grant a preliminary injunction against the implementation of the final COOL rule.¹³⁷ The plaintiffs argued that they would likely succeed in challenging USDA on the final rule, and that they would suffer irreparable harm if USDA continued to implement the rule during the challenge. On August 9, 2013, supporters of COOL, led by the United States Cattlemen's Association (USCA), filed a motion to intervene in the meat industry lawsuit, and the court granted the request on August 20.¹³⁸ The district court heard the plaintiffs' arguments for a preliminary injunction on August 27.

On September 11, 2013, the court denied the plaintiffs' request.¹³⁹ The court found that the plaintiffs were unlikely to succeed on their constitutional, statutory, or arbitrary and capricious claims. Furthermore, the court found that the plaintiffs did not demonstrate they would suffer irreparable harm if an injunction was not granted. AMI disagreed with the court's decision and appealed the decision.¹⁴⁰ Supporters of COOL that intervened in the case will continue to oppose AMI's court challenge to the COOL rule.¹⁴¹

The plaintiffs' appeal was heard on January 9, 2014, before a three judge panel of the U.S. Court of Appeals for the District of Columbia Circuit. On March 28, the court denied the injunction request on COOL, but then vacated the ruling the following week and ordered that the case be reheard en banc (all judges of the court) in May to reexamine the constitutional issue of compelled speech, and whether or not COOL requirements violated the plaintiffs free speech rights.¹⁴²

On July 29, 2014, the Court of Appeals ruled 8-3 against the meat industry plaintiffs. The court denied a request for a preliminary injunction to block USDA from implementing COOL, ruling that the COOL requirements do not amount to impermissible government-compelled speech under the First Amendment.¹⁴³ In September 2014, AMI petitioned for a rehearing on the case arguing that the segregation requirements of COOL amounted to USDA dictating the day-to-day operations of the livestock industry.¹⁴⁴ On October 31, 2014, the court denied the plaintiffs petition for a rehearing on free speech claims and a rehearing on other claims from the March ruling on non-free speech claims.¹⁴⁵ (See Appendix A for a timeline of key lawsuit developments.)

Tariff heading, sub-heading, or item

01.02

Live bovine animals

01.03

Live swine

02.01

Meat of bovine animals, fresh or chilled

02.02

Meat of bovine animals, frozen

02.03

Meat of swine, fresh, chilled, or frozen

0207.13.10

Cuts of offal, fresh or chilled, of spent fowl

0406.90

0808.10

Apples, fresh

0809.29

0812.10

Cherries, provisionally preserved (unsuitable in that state for immediate consumption)

10.05

Corn (maize)

1006.30.00

1602.32.11

1602.32.92

1602.49

1602.50

Prepared or preserved meat of bovine animals

1702.20.00

Maple sugar and maple syrup

1702.40.00

1702.60.00

1806.20

1806.90

19.02

19.04

19.05

2004.10.00

2009.11

Orange juice, frozen

2103.20

Tomato ketchup and other tomato sauces

22.04

Wine of fresh grapes, including fortified wines; grape must other than that of heading 20.09

2207.20

Ethyl alcohol and other spirits, denatured, of any strength

2940.00.00

3504.00

71.13

7306.40.00

7321.90

7326.11.00

9401.30

Swivel seats with variable height adjustment

9403.30.00

Wooden furniture of a kind used in offices

9404.29.00

• uncooked pasta, not stuffed or otherwise prepared, nesoi, other
• potatoes prepared or preserved other than by vinegar or acetic acid, frozen
• peas prepared or preserved, other than by vinegar, acetic acid or sugar, not frozen
• peanuts, prepared or preserved, nesoi, other
• nuts & seeds nes including mx; only: roasted excluding almonds, pecan nuts, coconut
• cherries nes, prep or preserved whether or not sugared, sweetened or spirited
• fruit & veg juice nes (excluding mx) unfermented unspirited, whether or not sugar/sweet
• juice mixtures containing only vegetable juices
• mixtures of fruit juices unfermented and not spirited whether or not sugared/sweet
• soya sauce
• tomato ketchup and other tomato sauces
• sauces and preparations nes and mixed condiments and mixed seasonings
• soups and broths and preparations thereof
• food preparations, nes, single fruit, legumes or vegetable
• food preparations, nes, mixtures of fruit, legumes or vegetables
• food preparations nes, containing milk solids exceeding 10% by weight
• mineral and aerated waters not containing sugar or sweetening matter nor flavored
• grape wines, sparkling, other
• red, pink, claret or white wines, of an alcoholic strength by volume higher than 14% volume
• fermented beverages nes; only: sparkling beverages made, in part, from malt
• sunflower seed oil-cake & other solid residues, whether or not ground or pellet
• rape/colza seed oil-cake, o/t low erucic acid & o solid residue, w/n ground/pellet
• dog or cat food put up for retail sale
• artists' students' etc. colors in sets
• manicure or pedicure preparations
• curtain rods
• office and desk equip a parts, of base metal, other
• combined refrigerator-freezers w separate doors, other refrigerators, household type, compression-type
• coffee makers
• filtering or purifying machinery and apparatus for
• gases nesoi, other dishwashing machines of the HH type
• trench diggers
• washing machines of a dry linen capacity <-10 kg, with built-in dryer, nes
• washing machines of a dry linen capacity <=10 kg, with built-in dryer, nesoi, other
• electro-thermic appliances, domestic, nes, other
• sunglasses
• gas masks
• games operated by coins/banknotes/bank cards/sim art, o/t bowling alley equip
• ball-point pens, of base metal
• ball-point pens, other
• felt-tipped and other porous-tipped pens and markers
• duplicating stylos; pen/pencil holders; parts of pens, markers, pencils, nes, other
• pencils and crayons, with leads encased in a rigid sheath, nes

Author Contact Information

Acknowledgments

Previous versions of this report were written by CRS Specialist in Agricultural Policy [author name scrubbed], retired. CRS Legislative Attorneys [author name scrubbed] and [author name scrubbed] provided reviews of the WTO processes and procedures. Also, CRS Legislative Attorneys Emily Barbour and Jeanne Grimmett, retired, contributed the basics on these WTO topics in earlier report updates.

Footnotes

Agriculture and Agri-Food Canada, "Minister Ritz Calls for Outright Repeal of United States Country of Origin Labelling (COOL)," press release, July 30, 2015, http://news.gc.ca/web/article-en.do?nid=1011969&_ga=1.70883986.385702904.1438289226.

Government of Canada, Foreign Affairs, Trade and Development Canada, "Canada-Mexico Statement on Repeal of U.S. Country of Origin Labelling," press release, December 19, 2015.

81 Federal Register 10755 (March 2, 2016).

USDA, AMS, "Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Wild and Farmed-Raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts," 74 Federal Register 2658 (January 15, 2009). This final rule replaced the interim final rule for seafood (69 Federal Register 59708 (October 5, 2004)), and the interim final rule for all other covered commodities (73 Federal Register 45106 (August 1, 2008)).

USDA, "Vilsack Announces Implementation of Country of Origin Labeling Law," press release, February 20, 2009. The Vilsack letter is available at http://www.usda.gov/documents/0220_IndustryLetterCOOL.pdf.

Wendy J. Umberger, "Will Consumers Pay a Premium for Country-of-Origin Labeled Meat?," Choices, 4^th Quarter 2004.

Gary W. Brewster et al., "Who Will Bear the Costs of Country-of-Origin Labeling?," Choices, 4^th Quarter 2004; Daniel D. Hanselka et al., "Demand Shifts in Beef Associated with Country-of-Origin Labeling to Minimize Losses in Social Welfare," Choices, 4^th Quarter 2004; and Alejandro Plastina and Konstantinos Giannakis, "Market and Welfare Effects of Mandatory Country-of-Origin Labeling in the U.S. Specialty Crops Sector," American Agricultural Economics Association Annual Meeting, Portland, Oregon, 2007.

74 Federal Register 2658 (January 15, 2009), pp. 2682-2700.

The COOL statute uses by reference this definition of "retailer" laid out in the Perishable Agricultural Commodities Act to identify those retailers required to comply with COOL requirements.

Steve Kay, "Retailers Can Use Various Label Methods," Cattle Buyers Weekly, August 4, 2008; Stephen Clapp, "Tester Asks USDA to Tighten COOL Meat Requirements," Food Chemical News, September 15, 2008.

AMS, "Country of Origin Labeling (COOL) Frequently Asked Questions," September 26, 2008.

USDA, AMS, January 12, 2009, fact sheet on the mandatory COOL final rule, p. 5.

"NFU Statement: USDA Issues Final Rule for COOL," January 12, 2009.

Letter to Secretary of Agriculture Tom Vilsack, February 3, 2009, http://web.archive.org/web/20090226012829/http://dorgan.senate.gov/newsroom/extras/020309vilsack.pdf.

Letter from Secretary Vilsack to Industry Representatives, February 20, 2009, http://www.usda.gov/documents/0220_IndustryLetterCOOL.pdf.

Percentages calculated by CRS based on USDA estimates of retail-level COOL coverage in pounds, divided by total annual supply (USDA data on domestic production plus imports).

USDA, AMS, "Frequently Asked Questions," January 12, 2009.

AMS, FY2016 Budget Explanatory Notes, Congressional Justification, February 2015, http://www.obpa.usda.gov/21ams2016notes.pdf#page=34.

USDA, OIG, "Implementation of Country of Origin Labeling," August 2011, pp. 1 and 4, accessed at http://www.usda.gov/oig/webdocs/01601-04-HY.pdf.

U.S. Trade Representative, "Vilsack, Kirk Comment on Canadian Panel Request Regarding Country-of-Origin Labeling," press release, October 7, 2009.

According to the WTO, a regulation is more restrictive than necessary when the objective pursued can be achieved through alternative measures which have less trade-restricting effects, taking account of the risks non-fulfilment of the objective would create.

The Dispute Settlement Body has the sole authority to establish "panels" of experts to consider a trade dispute case filed by any WTO member country, and to accept or reject the panels' findings or the results of an appeal. It monitors the implementation of the rulings and recommendations, and has the power to authorize retaliation when a country does not comply with a ruling.

Various trade publication reports, including Cattle Buyers Weekly, "MCOOL Has Cost Canadian Producers C$92M," December 8, 2008; Agri-Pulse, "COOL Regulations Create Heartburn for Canadians," December 3, 2008; and Washington Trade Daily, December 2, 2008, pp. 3-4.

The AMI merged with the North American Meat Association to form the North American Meat Institute (NAMI) in January 2015. NAMI is usually referred to as the Meat Institute.

AMI, "American Meat Institute Tells U.S. Trade Representative That Mandatory Country-of-Origin Labeling Violates International Trade Obligations," January 8, 2010, http://www.meatami.com/ht/display/ReleaseDetails/i/56358.

NCBA, "NCBA Statement on Canadian WTO Complaint Against U.S. COOL Law," October 7, 2009.

USCA, "USCA and Farmers Union Urge Vigorous COOL Defense," press release, January 12, 2010.

R-CALF USA, "Canada, Mexico Have No Standing to Bring Complaint Against U.S. COOL Law," July 2, 2009.

The TBT Agreement is summarized in CRS Report R41306, Trade Law: An Introduction to Selected International Agreements and U.S. Laws. The GATT 1994 commitment refers to the provision that requires laws and regulations to be administered "in a uniform, impartial and reasonable manner."

WTO, United States—Certain Country of Origin Labelling (COOL) Requirements, Reports of the Panel, WT/DS384/R, WT/DS386/R, November 18, 2011, http://www.wto.org/english/tratop_e/dispu_e/384_386r_e.pdf. Background on the COOL dispute case is available on the WTO's website at http://wto.org/english/tratop_e/dispu_e/cases_e/ds384_e.htm (Canada) and http://wto.org/english/tratop_e/dispu_e/cases_e/ds386_e.htm (Mexico).

USTR, "Statement in Response to WTO Panel Decision on Country of Origin Labeling," November 18, 2011.

NCBA, "Statement from NCBA Vice President of Government Affairs Colin Woodall Regarding WTO Ruling on US Country of Origin Labeling," November 11, 2011; Pork Magazine, "NPPC: What's on Tap for 2012?" January 2012; AMI, "WTO Rules in Favor of Canada in Complaint Over U.S. Country-of-Origin Labeling Law," November 18, 2011.

FMI, "Food Retail Industry Applauds WTO Ruling on COOL," November 23, 2011.

R-CALF, "U.S. Sovereignty Usurped by WTO's COOL Decision," November 18, 2011; USCA, "WTO Dispute Panel Issues Final COOL Report," November 21, 2011.

"TCFA Members Face Scary Issues from Washington," High Plains/Midwest Ag Journal, November 14, 2011.

Office of Senator Tim Johnson, "Johnson, Enzi to Administration: Keep COOL Strong," press release, December 15, 2011.

Foreign Affairs and International Trade Canada, "Canada Wins World Trade Organization Case on U.S. Country-of-Origin Labelling," November 18, 2011, http://www.international.gc.ca/media_commerce/comm/news-communiques/2011/349.aspx?lang=eng&view=d; Farmscape, "Canada Hopes for Negotiated Resolution of M-COOL Dispute," November 22, 2011.

CPC, "Canadian Pork Producers Welcome the WTO Panel Decision on COOL," press release, November 18, 2011; CCA, "WTO Rules Strongly in Favor of Canada in COOL Case," press release, November 18, 2011.

The Appellate Body is a seven-person standing body that hears WTO Member appeals of dispute settlement reports. For more information, see http://wto.org/english/tratop_e/dispu_e/appellate_body_e.htm.

"U.S. to Appeal WTO Ruling Against Meat Labels," Reuters, March 23, 2012; "USTR Will Appeal WTO Ruling on COOL," Agri-Pulse.com, March 23, 2012. USTR's appeal submission to the WTO is available at http://www.ustr.gov/sites/default/files/US.AppellantSub.fin_.pdf.

For details, see "Adoption of Panel Reports/Appellate Review (Articles 16, 17, 20)" in CRS Report RS20088, Dispute Settlement in the World Trade Organization (WTO): An Overview.

The DSU is one of the multilateral agreements resulting from the Uruguay Round that provides the primary means for WTO members to settle disputes arising under WTO agreements.

USDA, AMS, "Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts," 78 Federal Register 15645 (March 12, 2013).

USDA, AMS, "Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts," 78 Federal Register 31367 (May 24, 2013). The rule amends 7 C.F.R. 60.124, 65.240, and 65.300. It is called the revised COOL rule to distinguish it from the original 2009 COOL rule.

78 Federal Register 15645 (March 12, 2013), pp. 15647-15652. USDA's cost estimate analysis is summarized in Table 1 on p. 15650.

78 Federal Register 31367 (May 24, 2013), pp. 31377-31382. Adjustment costs are summarized in Table 4 on p. 31381.

Ibid., p. 31368.

For analysis of COOL benefits in 2009, see 74 Federal Register 2658 (January 15, 2009), pp. 2682-2700.

USCA, "USDA Finalizes COOL Rule," press release, May, 23, 2013, http://www.uscattlemen.org/Templates/Press_Room/2013_Press_Room/5-23Final-COOL-Rule.html.

NFU, "NFU Releases Analysis on COOL Compliance," press release, February 12, 2013. Analysis available at http://cdn.e2ma.net/userdata/5030/assets/docs/SS_COOL_Compliance_Memo_New_Final_Four_Groups.pdf.

R-CALF, "R-CALF USA Pleased with Final COOL Rule Released Today," press release, May 23, 2013.

AMI, "Burdensome Country-of-Origin Labeling Rule Will Not Satisfy WTO or Trading Partners, But Will Harm U.S. Agriculture," press release, May 23, 2013, http://www.meatami.com/ht/display/ReleaseDetails/i/90194.

NCBA, "NCBA Statement on USDA Issuing a Final Rule on Mandatory Country of Origin Labeling," press release, May 23, 2013, http://www.beefusa.org/newsreleases1.aspx?NewsID=2934.

Brett Wessler, "COOL Rules Lead Tyson to Close Door on Canadian Cattle," Drovers CattleNetwork, October 24, 2013.

CCA, "U.S. Continues to Discriminate Against Cattle Imports," press release, May 23, 2013, http://www.cattle.ca/assets/NewsArticle-2013/1328-CCA-News-Release-23-05-2013-U-S-continues-to-discriminate-against-cattle-imports.pdf.

CPC, "US Flouting of WTO Ruling on COOL Shocking and Appalling," press release, May 23, 2013, http://www.cpc-ccp.com/news_article.php?id=88.

Foreign Affairs and International Trade Canada, "Statement by Ministers Fast and Ritz on U.S. Country of Origin Labelling," press release, May 23, 2013, http://www.international.gc.ca/media_commerce/comm/news-communiques/2013/05/23a.aspx?lang=eng.

Secretary of Foreign Affairs, Embassy of Mexico, "Mexico Opposes the New US Rule on Mandatory Country of Origin Labeling," press release, May 28, 2013, http://embamex.sre.gob.mx/eua/index.php/en/comunicados2013/631-comunicado-de-prensa-mexico-se-opone-a-la-nueva-regla-de-estados-unidos-sobre-etiquetado-de-pais-de-origen-cool.

Foreign Affairs and International Trade Canada, "Statement by Ministers Fast and Ritz on U.S. Country of Origin Labelling," press release, June 7, 2013, http://www.international.gc.ca/media_commerce/comm/news-communiques/2013/06/07a.aspx. The retaliation list is included in the press release.

Department of Finance, "Notice Seeking Comments on Possible Trade Retaliation Action Against the United States in Response to That Country's Failure to Comply with the World Trade Organization Ruling on Certain Country of Origin Labelling Requirements," Canada Gazette, Vol. 147, No. 24, June 15, 2013, http://gazette.gc.ca/rp-pr/p1/2013/2013-06-15/html/notice-avis-eng.html#d115.

For information on the U.S.-Mexico trucking dispute, see CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications.

CPC, "CPC Releases Report on COOL Damages to Canada's Pork Industry," press release, January 14, 2013, http://www.cpc-ccp.com/documents/news-releases/2013%20ESTIMATES%20OF%20MCOOL%20IMPACT%20ON%20CANADA%20final.pdf.

Dan Sumner, Canadian Losses from U.S. COOL Implementation, prepared for the Canadian Cattlemen's Association, September 27, 2012.

Letter from Ross Wilson, president and CEO, Texas Cattle Feeders Association, to USDA, April 11, 2013.

Foreign Affairs, Trade and Development Canada, "Statement by Ministers Fast and Ritz on U.S. Country of Origin Labelling," press release, June 7, 2013, http://www.international.gc.ca/media_commerce/comm/news-communiques/2013/06/07a.aspx?lang=eng, and Embassy of Mexico in the United States, Ministry of Economy, "Mexico Will Continue Challenging the Country of Origin Labeling (COOL) Requirements Before the WTO," press release, June 10, 2013, http://embamex.sre.gob.mx/eua/index.php/en/comunicados2013/641-comunicado-de-la-secretaria-de-economia-mexico-continuara-impugnando-la-regla-de-etiquetado-de-pais-de-origen-en-la-omc.

WTO, Understanding Between the United States and Canada Regarding Procedures Under Articles 21 and 22 of the DSU, WT/DS/384/25, June 13, 2013, and Understanding Between the United States and Mexico Regarding Procedures Under Articles 21 and 22 of the DSU, WT/DS/384/24, June 13, 2013. Because WTO dispute settlement rules provide conflicting timetables in the event that a party requests both authorization to retaliate and a compliance panel, disputing parties often enter into so-called "sequencing" agreements that accommodate both procedures. For details, see "Compliance Issues, Sequencing" in CRS Report RS20088, Dispute Settlement in the World Trade Organization (WTO): An Overview.

WTO, Recourse to Article 21.5 of the DSU by Canada, WT/DS/384/26, August 20, 2013, and Recourse to Article 21.5 of the DSU by Mexico, WT/DS/384/25, August 20, 2013.

Under WTO rules, the United States could not object to the second panel request.

WTO, United States-Certain Country of Origin Labelling (COOL) Requirements, Recourse to Article 21.5 of the DSU by Canada and Mexico, Reports of the Panel, WT/DS384/RW and WT/DS386/RW, October 20, 2014, http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds384_e.htm.

WTO, Understanding Between the United States and Canada [Mexico] Regarding Procedures Under Articles 21 and 22 of the DSU, WT/DS/384/25, June 13, 2013. For details on Articles 21 and 22, see CRS Report RS20088, Dispute Settlement in the World Trade Organization (WTO): An Overview.

WTO, United States–Certain Country of Origin Labelling (COOL) Requirements, Recourse to Article 21.5 of the DSU by Canada and Mexico, Reports of the Appellate Body, WT/DS384/AB/RW and WT/DS386/AB/RW, May 18, 2015.

Spencer Chase, "Farmers Union, Others Urge Appeal of WTO COOL Ruling," AgriPulse, October 23, 2014.

Press release, "New Study: Economic Downturn and Other Factors, Not COOL, Caused Decline in Live Cattle Imports to the U.S.; Canadian Claims of Economic Damage Without Merit," NFU, January 22, 2014. Study available at http://www.nfu.org/images/COOLReport1132015Final.pdf.

Letter from COOL Reform Coalition to Members of Congress, October 30, 2014, http://www.coolreform.com/uploads/sites/476/COOL%20Letter%20to%20Congress%2010-30-14.pdf.

Letter from 112 House Members of Congress to Vilsack, Secretary of Agriculture, July 30, 2014, http://crawford.house.gov/uploadedfiles/coolletter.pdf.

Letter from 32 Senators to Chairwoman Mikulski and Ranking Member Shelby, Senate Appropriations Committee, October 6, 2014, http://www.scribd.com/doc/242079437/Tester-letter-to-Senators-Mikulski-and-Shelby-on-COOL.

Canada and Mexico, "Statement by Canada and Mexico on U.S. Country of Origin Labelling," press release, October 20, 2014, http://www.international.gc.ca/media/comm/news-communiques/2014/10/20b.aspx?lang=eng.

The Canadian request to the WTO of C$3.068 is calculated at US$1.00=CDN$1.27.

USTR, United States-Certain Country of Origin Labelling (COOL) Requirements: Recourse by the United States to Article 22.6 of the DSU (Canada), Written Submission (Public Version), July 30, 2015, https://ustr.gov/sites/default/files/files/Issue_Areas/Enforcement/DS/Pending/US.Sub1.%28DS384%29.Public.pdf.

There have been 11 different arbitration decisions on retaliation since 1995. On average the decisions were issued in six months.

Based on the USD/CAD exchange rate ($1.3499) published in the Wall Street Journal on December 8, 2015.

WTO, United States-Certain Country of Origin Labelling (COOL) Requirements: Recourse to Article 22.6 of the DSU by the United States, Decisions by the Arbitrator, WT/DS384/ARB, WT/DS386/ARB, December 7, 2015.

Office of Chief Economist, Economic Analysis of Country of Origin Labeling (COOL), USDA, report to Congress, April 2015.

USDA, "Statement from Agriculture Secretary Tom Vilsack on the Country of Origin Labeling Requirements for Beef and Pork," press release, December 18, 2015, http://www.usda.gov/wps/portal/usda/usdamediafb?contentid=2015/12/0345.xml&printable=true&contentidonly=true.

Text of the amendment is available at http://amendments-rules.house.gov/amendments/MASSIE_028_xml69151736343634.pdf.

Kellie Mejdrich and Ellen Ferguson, "House Panel Advances Meat-Labeling Repeal," Congressional Quarterly, May 20, 2015, http://www.cq.com/doc/committees-2015052000326538?1&search=houHotdn; and Senator Roberts, "Chairman Roberts Applauds House Passage of COOL Repeal," press release, June 10, 2015, http://www.ag.senate.gov/newsroom/press/release/chairman-roberts-applauds-house-passage-of-cool-repeal.

This is the voluntary "Product of Canada" label. According to the Canadian Food Inspection Agency's guidance documents on origin claims, the "Product of Canada" claim can be applied to meat from Canadian animals that are slaughtered in Canada. Animals are considered Canadian if they are born or hatched, raised, and slaughtered in Canada or, in the case of feeder cattle, if they have spent a period of at least 60 days in Canada prior to slaughter in Canada. See http://www.inspection.gc.ca/food/labelling/food-labelling-for-industry/origin/eng/1393622222140/1393622515592?chap=5#s1c5.

Agriculture and Agri-Food Canada, "Minister Ritz Calls for Outright Repeal of United States Country of Origin Labelling (COOL)," press release, July 30, 2015, http://news.gc.ca/web/article-en.do?nid=1011969&_ga=1.70883986.385702904.1438289226.

U.S. Congress, House Committee on Appropriations, Explanatory Statement Submitted by Mr. Rogers of Kentucky, Chairman of the House Committee on Appropriations Regarding the House Amendment to the Senate Amendment on H.R. 3547, Consolidated Appropriations Act, 2014, 113^th Cong., January 13, 2014, p. 12, http://docs.house.gov/billsthisweek/20140113/113-HR3547-JSOM-FM-B.pdf.

Letter from Representative DeLauro to Secretary Vilsack, January 23, 2014, http://delauro.house.gov/images/pdf/letter_to_usda_re_cool_fy14_approps.pdf.

For example: Charles Abbott, "U.S. Meat-Labeling Law, a WTO Issue, Now Farm Bill Target," Reuters, October 30, 2013, and "Opponents Secure Lucas' Support in New Push to Change Law," Inside Trade, October 31, 2013.

Letter from 69 groups opposing COOL to Leadership of the Farm Bill Conference, October 29, 2013, http://soygrowers.com/wp-content/uploads/2013/10/COOL-letter-10-29-13-FINAL.pdf.

John Maday, "Groups Encourage Congress to Preserve COOL Rules," Drovers CattleNetwork, January 22, 2014. Letter from 96 groups supporting COOL to Farm Bill Conferees, January 22, 2014, available at http://www.r-calfusa.com/COOL/140122FarmBillConfereeCOOLletterWith98Groups.pdf.

Jenny Hopkinson, "Tom Vilsack: More Than Agriculture at Stake in Farm Bill," Politico, November 14, 2013, http://dyn.politico.com/printstory.cfm?uuid=9D01F578-806A-43EF-97FF-D125454D8BB2.

Letter from livestock and poultry industry groups to Conference leadership, The Hagstrom Report, January 27, 2014.

P.L. 107-171, Section 10816, approved May 13, 2002, 111 Stat. 533; and P.L. 110-246, Section 11002, approved June 18, 2008, 122 Stat. 2113. The COOL provisions in the AMA of 1946 are codified at 7 U.S.C. §§1638-1638d.

The J list is published in 19 C.F.R. §134.33, available at http://edocket.access.gpo.gov/cfr_2008/aprqtr/19cfr134.33.htm.

USDA, Economic Research Service (ERS), Livestock, Dairy, and Poultry Outlook, December 17, 2009, p. 5.

CattleFax, "CattleFax Long Term Outlook Special Edition," December 12, 2008, p. 3.

CME Daily Livestock Report, January 7, 2009.

Darrell S. Peel, Kenneth H. Mathews, Jr., and Rachel J. Johnson, Trade, the Expanding Mexican Beef Industry, and Feedlot and Stocker Cattle Production in Mexico, USDA, ERS, August 2011. Stocker cattle are lightweight, usually 200 to 400 pounds, and are placed in grazing programs to grow the animals. Feeder cattle are heavier, mostly 400 to 700 pounds, and may be placed on grass or placed directly in feedlots.

Feeder pigs are light-weight pigs—the majority weighing less than 15 pounds, others weighing between 15 and 100 pounds—that are shipped to the United States for feeding to slaughter-ready weight.

Mildred Haley, Market Integration of the North American Hog Industries, USDA, ERS, November 2004, pp. 9-12.

USDA, ERS, Livestock, Dairy, and Poultry Outlook, April 16, 2009, p. 4.

Steve Kay, "MCOOL Hurts Iowa Hog Finishers," Cattle Buyers Weekly, April 27, 2009.

A summary of key WTO findings and full WTO panel reports are available at http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds384_e.htm.

The panel made its determination on what is, and is not, a technical regulation with reference to TBT's Annex 1.1. It defines such to be a document that spells out "labeling requirements" among other features, including administrative provisions, "with which compliance is mandatory." The panel concluded that the COOL statute and final rule are "legal instruments that are legally binding in US law," with wording clearly mandating compliance, while the Vilsack letter, rather than mandating additional labeling requirements, presents them as "suggestions for voluntary action."

These involve applying mathematics and statistical methods to study relationships between economic variables.

"Obama Administration Appeals Ruling on Country Labeling for Beef, Pork," Inside US Trade, March 30, 2012.

WTO, United States—Certain Country of Origin Labelling (COOL) Requirements, 'Summary of Key Findings," available at http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds384_e.htm.

Compliance panel report, Section 8.3, pp. 205 and 206.

The panel rejected Canada's and Mexico's argument that COOL's objective is to protect the domestic U.S. livestock industry (p. 143 of WTO panel's report, footnote 30).

WTO, United States—Certain Country of Origin Labelling (COOL) Requirements, 'Summary of Key Findings," available at http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds384_e.htm.

The four alternatives were (1) label by substantial transformation, i.e., country of slaughter, with voluntary labels for other production steps; (2) extend ground beef label requirements to muscle cuts, with 60-day inventory allowance; (3) require mandatory traceback of muscle cuts of meat with precise information—that is, preserving the link between animal and muscle cut; and (4) require that labels include the state or province at each production step.

WTO, Communication from the United States to the Chairman of the Dispute Settlement Body, WT/DS384/19 and WT/DS386/18, August 23, 2012; John Maday, "COOL adversaries comment on ruling," Drovers CattleNetwork, July 2, 2012, http://www.cattlenetwork.com/e-newsletters/drovers-daily/COOL-adversaries-comment-on-ruling-161140725.html?view=all.

7 U.S.C. 1638a. See above "Defining and Labeling Origin for Meats."

Rick Jordahl, "AMI urges U.S. to bring COOL law into compliance," PorkNetwork, July 2, 2012.

Glynn T. Tonsor, Jayson L. Lusk, and Ted C. Schroeder, et al., Mandatory Country of Origin Labeling: Consumer Demand Impact, Kansas State University, Factsheet, November 2012, p. 2, http://www.agmanager.info/livestock/policy/Tonsor_KSU_FactSheet_MCOOL_11-13-12.pdf.

Steve Kay, "Clock Ticks On MCOOL Solution," Cattle Buyers Weekly, December 10, 2012.

Ian Elliott, "Only Small Changes Needed to Comply with COOL Ruling," Feedstuffs, December 24, 2012.

WTO, United States—Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/24 and WT/DS386/23, Arbitrator's Report, December 4, 2012, p. 14.

Steve Meyer and Len Steiner, Livestock Daily Report, December 6, 2012.

"USTR Abandons Regulatory COOL 'Fix' in Face of Stakeholder Division," World Trade Online, February 2, 2012.

Letter from Bill Bullard, CEO, August 22, 2012, http://www.r-calfusa.com/COOL/120822LetterToUSTRandUSDAreCOOLStrategy.pdf.

Steers and spayed heifers imported from Mexico must be marked M and M_x, respectively, and cattle from Canada must be marked with CAN (9 C.F.R. §93.427(c) and §93.436(b)(2)). Cattle imported for immediate slaughter must be shipped in sealed conveyances from the port of entry to the slaughter facility (9 C.F.R. §93.420, §93.429, and §93.436(a)).

NFU, "NFU Releases Analysis on COOL Compliance," press release, February 12, 2013. Analysis available at http://cdn.e2ma.net/userdata/5030/assets/docs/SS_COOL_Compliance_Memo_New_Final_Four_Groups.pdf.

Letter from Senators Tester, Enzi, Johnson (SD) et al. to Secretary of Agriculture Vilsack and U.S. Trade Representative Kirk, January 31, 2013, http://www.tester.senate.gov/?p=press_release&id=2755.

The plaintiffs are the American Meat Institute, the American Association of Meat Processors, the Canadian Cattlemen's Association, the Canadian Pork Council, the National Cattlemen's Beef Association, the National Pork Producers Council, the North American Meat Association, and the Southwest Meat Association. Subsequently, Mexico's National Confederation of Livestock Organizations joined the lawsuit. A copy of the lawsuit is available at http://www.meatami.com/ht/a/GetDocumentAction/i/92223.

John Maday, "Eight Organizations File Legal Challenge to New COOL Rules," PorkNetwork, July 9, 2013, http://www.porknetwork.com/e-newsletters/pork-daily/Eight-organizations-file-legal-challenge-to-new-COOL-rules-214758951.html, and Bryan Salvage, "'COOL' Just Got a Lot Hotter," Meat & Poultry, July 9, 2013.

National Farmers Union, "COOL Lawsuit Is Another Delaying Tactic," press release, July 10, 2013, http://www.nfu.org/news/news-archives/2013-news/253-consumers-and-their-food/1797-cool-lawsuit-is-another-delaying-tactic.

R-CALF, "Group Circulates Petitions to Stop Federally-Funded NCBA from Suing to Eliminate COOL," press release, July 11, 2013.

A copy of the injunction request is available at http://www.meatami.com/ht/a/GetDocumentAction/i/92882.

In addition to USCA, the National Farmers Union, the American Sheep Industry Association, and the Consumer Federation of America joined the motion to intervene. On August 23, Food & Water Watch, R-Calf, the South Dakota Stockgrowers Association, and the Western Organization of Resource Councils also requested intervenor status.

American Meat Institute v. USDA, No. 13-CV-1033 (D.D.C. Sept. 11, 2013).

AMI, "AMI Disagrees with Denial of Request for Preliminary Injunction in Country-of-Origin Labeling Lawsuit; Will Appeal Ruling," press release, September 11, 2013, http://www.meatami.com/ht/display/ReleaseDetails/i/93815/pid/287.

NFU, "COOL Appeal Another Attempt to Obstruct Consumers' Right to Know," press release, September 12, 2013.

Steve Kay, "Court Vacates Own COOL Decision," Cattle Buyers Weekly, April 7, 2014.

American Meat Institute v. USDA, 13-5281 (D.C. Cir. July 29, 2014).

Stephen Clapp, "AMI Seeks Rehearing on Appeals Court Decision Favoring COOL," Food Chemical News, September 25, 2014.

Tom Johnston, "Appeals Court Denies Meat Lobby's Request for COOL Rehearing," Meatingplace, October 31, 2014.