AMS Issues Final Rule on COOL Labeling; No Change from Proposal Despite Mexico & Canada Tariff Threat
In a move sure to draw the ire of the Canadian and Mexican governments, the Agricultural Marketing Service finalized without change its proposed rule on country of origin labeling (COOL) for muscle cut meat products. Both Canada and Mexico had threatened retaliation through possible tariff hikes if the U.S. went through with its proposal. The final rule is effective May 23, although AMS will allow covered products produced or packaged before that date. The agency said it will conduct an outreach program over the next six months to educate industry on the new COOL requirements.
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A 2012 World Trade Organization ruling held that the current COOL requirements, which came into force in 2009, discriminate against cattle and hogs imported from Canada and Mexico (see 12070208). The WTO set May 23, 2013 as the deadline for U.S. compliance. AMS proposed changes to bring COOL into compliance in March (see 13030828). The proposal was met with support from many consumer groups, but many industry groups, as well as the Canadian and Mexican governments, said the proposed COOL requirements would increase the burden on industry associated with using imported beef and pork (see 13041806). Nonetheless, the COOL final rule adopts the proposed regulation in its entirety.
Final Rule Adopts Elimination of Commingling
One of the most contentious provisions adopted in the COOL final rule is the elimination of commingling flexibility. Previously, muscle cuts of beef and pork from both the U.S. and other countries could be packaged together and sold as “product of U.S. and country x.” Now those provisions have been eliminated. Instead, muscle cuts from different countries must be packaged separately, and the country where each production step took place (birth, raising, slaughtering) must be identified on the label.
Consumer advocacy group Food & Water Watch applauded removal of the allowance for commingling in a May 23 statement. "The final rule eliminates the vague and misleading 'mixed origin' country of origin label for meat and ensures that each cut of meat clearly displays each stage of production ... on the label," it said. "This commonsense approach improves the usefulness of the information consumers receive from the label and allows livestock producers to distinguish their products in the marketplace." The group said the change addresses the WTO's concerns with COOL requirements.
But foreign governments and some industry groups have already expressed concern at the change. “Rather than taking steps to eliminate the discriminatory burdens placed on the use of Mexican-born cattle in the processing of meat products, it would enhance those burdens by eliminating the commingling flexibility in the present regulations and increasing the complexity of labeling requirements ... ,” the Mexican government had said in comments on the proposed rule. Both Canada and Mexico said they would retaliate if the U.S. finalized its proposal. Comments from a pork industry association noted that Mexico raised tariffs on ham in response to U.S. noncompliance with the WTO ruling on the U.S.-Mexico trucking dispute, and expressed fear that the same treatment would be applied to pork products because of noncompliance with the WTO COOL ruling.
In remarks before the WTO General Assembly May 21 (here), Mexican Agriculture Secretary Enrique Martinez y Martinez said Mexico would defend the WTO’s COOL ruling. He expressed hope that U.S. Agriculture Secretary Tom Vilsack “will help us to resolve the problem for the simple reason that we have logic and justice behind us.”
After reviewing the final rule, the Canadian government was less-than-pleased. "Canada is extremely disappointed with the regulatory changes put forward by the United States today with respect to COOL," said Canadian Minister of International Trade Ed Fast and Minister of Agriculture Gerry Ritz in a joint statement May 23 (here). "These changes will not bring the United States into compliance with its WTO obligations," they said. "These changes will increase discrimination against Canadian cattle and hogs and increase damages to industry on both sides of the border. Canada will consider all options at its disposal, including, if necessary, the use of retaliatory measures," the Canadian ministers said.
(See the AMS final rule for other provisions on country of origin labeling for muscle cuts of meat, including toughened labeling requirements for U.S. meat, and clarification of country of origin for imported muscle cuts.)