Lessons Learned from Country of Origin Labelling Dispute

This week the World Trade Organization threw out the US appeal against its ruling over mandatory country of origin labelling.

The long-running dispute concerned the extra burden of record keeping imposed on exporters of meat and livestock to the US, which Canada and Mexico, who were leading the fight against the regulation, said gave the US an unfair advantage in the market.

The WTO had already ruled that the US was placing too much of a burden on exporting countries but the US has argued that changes it had made to the rules had made them fairer.

However, this week the Appellate Body of the WTO rejected the US arguments against the panel's findings and said that the panel's conclusions that the amended COOL measure increased the record-keeping burden for imported livestock.

The Appellate Body rejected US arguments that the panel's conclusions were based on “incorrect hypothetical” scenarios that were not based on actual, or the most common, trade situations.

The Canadian meat and livestock sectors are celebrating the victory, as are some sections of the US industry, who were concerned about the damage the regulations might do to the cross border trade with Canada and Mexico.

However, now all parties are waiting to see how the US will react to the ruling and whether further amendments will be made.

There are also concerns that the US could now be subject to punitive retaliatory sanctions from Canada and Mexico.

The implications of the ruling by the WTO will also have ramifications around the world for other countries and blocs that want to implement compulsory country of origin labelling.

The lessons learned are that it must not be a restrictive measure and must not be trade distorting.