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COOL Ruling Puts U.S. in the Hot Seat

In a move intended to avoid harmful retaliatory tariffs from Canada and Mexico, five Democratic senators wrote to both majority and minority Senate leaders, asking them to repeal the Country of Origin Labeling (COOL) requirements for beef and pork. The leadership should heed their call, and the lead of the House of Representatives.

Democratic Sens. Diane Feinstein and Barbara Boxer of California, Mark Warner and Tim Kaine of Virginia, and Joe Donnelly of Indiana asked Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Harry Reid (D-Nev.) to quickly vote to repeal the labeling law before the World Trade Organization (WTO) allows Mexico and Canada to assess up to $3 billion of tariffs on U.S. goods exported to those countries. The WTO is expected to authorize these measures in December.

The House had already voted for a repeal earlier in 2015. Now it’s time for the Senate to act.

The original COOL rule, part of the 2008 U.S. farm bill, mandated that the “Made in America” label could only be applied to meat products from animals that had been born, raised, and harvested in the U.S. That meant that livestock that was born in the U.S., raised in Canada or Mexico, and slaughtered in one of those countries had to carry labeling information outlining all those details, and to be checked and verified along the supply chain.

However, in 2009 Canada and Mexico brought a complaint to the World Trade Organization, alleging that the rule discriminated against those two countries and violated the WTO rule on Technical Barriers to Trade (TBT).

In 2012, the WTO ruled against the U.S., which went back to the legislative drawing board to amend the rule. Again, Canada and Mexico filed a complaint, which was also decided against the U.S. in May 2015.  The Appellate Body found the COOL labeling rule and its modifications “to be inconsistent with the GATT 1994 and the TBT Agreement into conformity with its obligations under those Agreements.”

As CEI has long pointed out, the COOL law and regulations are protectionist, non-tariff trade barriers—that is, laws that ostensibly address a safety or information issue but are really designed to keep out competitive products. A 2012 study co-published by the Fraser Institute of Canada and CEI notes that the labeling rule discriminates against two of the U.S.’s largest trading partners, is unnecessary for consumer information, and imposes complicated and costly record-keeping requirements on producers.

See here and here for more CEI comments on the COOL issue.