WTO Panel Favors Mexico, Canada On US Label Rules

The world's top trade body ruled against U.S. "country of origin" labels on meat products, which caused a sharp drop in those countries sales to the U.S.

GENEVA (AP) — The world's top trade body ruled against U.S. "country of origin" labels on meat products Friday in a trade victory for Canada and Mexico that could lower prices on their cattle and hog exports.

In late 2009, the Geneva-based World Trade Organization opened an investigation on U.S. labeling rules for cattle and hog imports from Canada and Mexico, at the two countries' request.

The country of origin labeling regulation — known as COOL — took effect in 2008. Canada and Mexico each claimed their livestock industries were hurt by a sharp drop in U.S. cattle and hog imports because the labeling raised the costs and discouraged imports of their produce.

Canada, whose biggest foreign market for cattle and hogs is the United States, said its exports of cattle dropped 23 percent and its exports of hogs dropped 36 percent between 2007 and 2009.

Mexico also said its cattle exports to the United States — more than half a billion dollars a year — were hurt unfairly by the "protectionist" COOL labeling.

The U.S. Department of Agriculture required U.S. packers to track and notify customers of the origin of meat and other agricultural products at every stage of production, including retail.

But the panel said that requirement did not qualify as consumer labeling about the origin of produce, and could therefore be considered an unnecessary extra cost.

Instead, the panel said, the U.S. violated WTO rules because Canadian and Mexican livestock imports got "treatment less favorable than that" of U.S. domestic livestock.