Country of Origin
In the past few years, North American countries have been engaged in a trade conflict over meat labelling law. The United States has a law, called the Country of Origin Labelling (COOL) law, which makes it mandatory for meat producers to put a label on the meat stating its country of origin. This means that consumers buying meat in the U.S. can tell where the animal was raised and slaughtered.
The Law Country of Origin Labelling requirements came into effect in the Unites States in 2008. Basically, the rule mandates that any meat product sold in retail stores must have a sign or label indicating its country of origin. This applies to products like steak, ground beef, pork chops and fresh chicken products. However, this law does not apply to meat and chicken sold in restaurants or to processed meat products.
The Battle Canada and Mexico are not happy with the COOL laws because they believe that the rules violate international trade laws. Canada and Mexico have appealed against the rules to the World Trade Organization (WTO).The reason given by the U.S. for the labelling rule is that consumers have a right to know where their meat comes from. They argue that if this rule is repealed, consumer health and safety will be compromised. The argument from the other North American countries is that this kind of labelling is a form of protectionism that gives an unfair advantage to American producers in violation of several trade agreements. Consumers maybe less inclined to buy imported meat and the Canadian and Mexican meat industries will suffer. Most retailers do not want to spend extra resources on labelling imported meat, and would rather simply purchase U.S. meat. Because of this, Canada and Mexico argue that the rule is a subtle, indirect way of steering U.S. meat retailers away from buying and selling imported meat. Although Canada’s share of the U.S. beef industry is only 3% the U.S. legislation costs the Canadian beef and pork industries $1 billion every year. Another key point in Canada’s argument is that the labelling laws don’t actually provide any safety measure for the consumers. Knowing where your meat comes from hardly matters; what’s more important is that the meat is safe for consumption, but on this the label gives no information. Both Canada and Mexico, along with The United States, are co-signees of the North American Free Trade Agreement (NAFTA). The countries also argue that the labelling legislation from the United States sours the agreement and the spirit in which it was signed.
The Ruling by World Trade Organisation Canada and Mexico have appealed to WTO against the COOL laws four times, and all four times, WTO has sided with them. WTO recognises that the COOL law violates international trade laws and causes discrimination against imported meat products. However, the U.S. has continued imposing the law. To stop this, a final ruling was passed in May 2015 which abolished mandatory labelling. Now, either the United States must change the law, or face retaliatory measures. Canada has filed for authorisation to impose retaliatory tariffs of more than $3 billion a year on products imported from the U.S. Further, it has also planned 100% surtax on other products imported from U.S. states that support the meat labelling requirements. The main targets are California, Pennsylvania, Michigan, Minnesota and Illinois. The surtax will be levied on imported products like wine, chocolates, ketchup, pasta, cereals and even frozen orange juice. The retaliatory trade sanctions could cost Michigan $700 million. Opinion among the general public regarding the COOL law differs widely. What do you think? Is country-of-origin labelling important?