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WTO Rules US Faces $1 Billion Annually For Meat Labeling

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Note: The World Trade Organization (WTO) ruled in favor of Canada and Mexico against the United States regarding the labeling of meat. This follows a recent decision on labeling of tuna.  The US will be forced to change their laws or face large payments for these trade violatins.

The WTO ruled that labeling meat under the Country Of Origin Labelling (COOL) law violates NAFTA and can result in up to a billion dollars in damages annually. Last month the WTO ruled that dolphin-safe tuna labeling laws which are required by U.S. law to protect dolphins from slaughter by tuna fisheries violates the rights of the Mexican fishing industry, also resulting in damages to the US.

We have argued that these corporate trade agreements undermine our sovereignty and the constitutional powers of Congress because trade tribunals can force countries to change laws passed in the public interest. These trade tribunals under investor state dispute settlement to protect corporations also undermine the federal court system because trade tribunals, often with corporate lawyers serving as temporary judges, determine the law and federal courts have no power to review those decisions.

Future issues like the labeling of genetically modified foods will have the same fate under the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) for the US and other nations. The Obama trade agreements involve many more nations than NAFTA and have wealthier transnational corporations. The TPP, just with its current membership, adds thousands of corporations who will be able to sue over US laws.

Below are four press releases reacting to this decision, each with a different perspective including Public Citizen, Food and Water Watch, Coalition for a Prosperous America and the National Farmers Union. KZ

Food & Water Watch

Washington, D.C.—“Today, the World Trade Organization once again overstepped its bounds and decided that the commonsense country of origin labeling law for beef and pork was an illegal trade barrier. Today’s ruling demonstrates how unaccountable foreign trade tribunals are trumping U.S. laws to benefit global agribusinesses.

“Multinational meatpackers have tried to eliminate COOL for a decade but have been stopped in the legislative, executive and judicial branches by the overwhelming public support for COOL. But trade disputes are the perfect venue for corporate interests to sidestep democracy and public opinion and unravel America’s laws. The COOL ruling shows that these international trade deals trump democracy itself.

“The WTO ruling is being used to justify immediate repeal of the COOL statute, but the Senate should reject efforts to repeal or weaken COOL, including meaningless attempts to make labeling voluntary. Congress must require the Obama Administration to live up to its original campaign promise to protect mandatory COOL.

“The White House has allowed its misguided trade agenda to cloud all other concerns. The U.S. Department of Agriculture should immediately promulgate rules to address the WTO concerns over COOL while maintaining mandatory labels. The United States has been modifying its dolphin-safe tuna rules for nearly three decades to address WTO concerns; the USDA should do the same to protect mandatory COOL.

“The activist judges at the WTO should be a clarion call to the U.S. Congress to reject new trade deals that allow our domestic laws to be undermined, including the Trans-Pacific Partnership. The American public deserves more democratic courage from Congress and a lot less kowtowing to foreign trade tribunals. The President should veto any legislation that repeals or weakens COOL.”

Food & Water Watch champions healthy food and clean water for all. We stand up to corporations that put profits before people, and advocate for a democracy that improves people’s lives and protects our environment.

National Farmer Union

WASHINGTON (December 7, 2015) – National Farmer Union (NFU) President Roger Johnson today denounced finding by the World Trade Organization (WTO) that the U.S. Country-of-Origin Labeling (COOL) law warrants $1.01 billion in retaliatory tariffs from Canada and Mexico, calling the process “inefficient and ineffective,” and pointed to the immediate passage of voluntary COOL to render the WTO decision moot.

“Today’s decision to allow Canada and Mexico to impose $1.01 billion in retaliatory tariffs is yet another symptom of the inefficiencies and ineffectiveness of the WTO,” said Johnson. “Time and again the WTO process has undermined U.S. sovereignty and the right of American consumers to know the origin of their food,” said Johnson. “Congress now only has one clear path forward for ensuring U.S. regulations are in compliance with the WTO while preserving a meat label with integrity, and that solution is voluntary COOL.”

Today’s WTO decision to allow Canada and Mexico to impose $1.01 billion in retaliatory tariffs against the United States is a far cry from the $90 million figure provided to the panel by the U.S. Trade Representative (USTR) in early August. Johnson said that such a high number is representative of the WTO’s ineffectiveness to provide sufficient guidance for ensuring laws are in compliance.

“The WTO rules without precedent and continues to undermine laws and regulations that benefit society,” said Johnson. “The U.S. tried to ensure COOL regulations were in compliance, but received insufficient guidance and consequently could be on the hook for exaggerated damages.”

Johnson noted that the decision underscores the immediate need for the U.S. to pass voluntary COOL, which has already received thumbs up from the U.S. Trade Representative, Canada and several multinational meatpackers.

“Voluntary COOL will solve the trade dispute once and for all, while protecting the integrity of the COOL label by defining what a ‘product of the U.S.’ is,” said Johnson. “Congress needs to act swiftly and pass voluntary COOL to avoid the $1.01 billion in retaliatory tariffs that are now approved by the WTO.”

National Farmers Union has been working since 1902 to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.

Coalition For A Prosperous America

Washington, D.C.- Today, a World Trade Organization (WTO) tribunal authorized over $1 billion in sanctions against the U.S., in retaliation for the congressionally passed Country of Origin Labeling (COOL) law being “incompliant with WTO standards.”

COOL law requires detailed labeling where the livestock was born, raised and slaughtered. This announcement is the final step in a WTO dispute brought by Mexico and Canada that has been ongoing for over seven years. The WTO has repeatedly – but wrongly – ruled that America’s COOL law discriminates against imported livestock in violation of our trade agreements with Canada and Mexico.

“COOL was passed by Congress in 2002 and is supported by nine out of ten Americans,” said Michael Stumo, CEO of the Coalition for a Prosperous America. “Our founding fathers gave the authority to pass laws such as COOL to the US Congress, not world government courts. Congress should focus upon taking back its power rather than acceding to transferring that power to global courts.”

Consumers across the U.S. rely on these labels to inform them of their food and allow them to make informed decisions regarding their meat. Congress is now likely to take that information away from them.

CPA affiliate R-CALF USA (Ranchers-Cattlemen Action Legal Fund) also criticized the amount of the sanctions, saying:  The WTO decision is utterly absurd. The entire value of Canada’s live cattle imports in 2014 was $1.753 billion and this represented an historical high. It is absolutely impossible that Canada could be suffering an annual loss representing 45 percent of Canada’s record high imports.

The COOL sanctions decision underlines the importance of stopping the Trans-Pacific Partnership which will subject US and state laws to more global tribunal oversight.

 Public Citizen

WASHINGTON, D.C. — Today’s World Trade Organization (WTO) ruling against the U.S. country-of-origin meat labels (COOL) that consumers rely on to make informed choices about their food provides a glaring example of how trade agreements can undermine U.S. public interest policies, Public Citizen said today. How the Obama administration responds to the WTO ruling will have a significant impact on its efforts to build congressional and public support for the controversial Trans-Pacific Partnership (TPP).

In his May 2015 speech at Nike headquarters, President Barack Obama said that critics’ warnings that the TPP could “undermine American regulation – food safety, worker safety, even financial regulations” was “just not true.” He said: “They’re making this stuff up. No trade agreement is going to force us to change our laws.”

“Today’s ruling makes clear that trade agreements can – and do – threaten even the most favored U.S. consumer protections,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “We hope that President Obama stands by his claim that ‘no trade agreement is going to force us to change our laws,’ but in fact rolling back U.S. consumer and environmental safeguards has been exactly what past presidents have done after previous retrograde trade pact rulings.”

In response to previous WTO rulings, the United States has rolled back U.S. Clean Air Act regulations on gasoline cleanliness rules successfully challenged by Venezuela and Mexico and Endangered Species Act rules relating to shrimping techniques that kill sea turtles after a successful challenge by Malaysia and other nations. The U.S. also altered auto fuel efficiency (Corporate Average Fuel Economy) standards that were successfully challenged by the European Union. After the final WTO ruling against the policy in May, Obama’s Agriculture Secretary Tom Vilsack also contradicted Obama’s claim, announcing: “Congress has got to fix this problem. They either have to repeal or modify and amend it.”

COOL requires meat sold in the United States to be labeled to inform consumers about the country in which animals were born, raised and slaughtered. COOL is supported by 92 percent of Americans, according to a recent poll, but has been under attack by Mexican and Canadian livestock producers and the U.S. meat processing industry.

The Canadian and Mexican governments challenged the policy and in 2011 won an initial WTO ruling. In 2013, the Obama administration altered COOL to remedy the WTO violations. The new rules provided consumers more information. Mexico and Canada had sought to weaken COOL and obtained a WTO ruling against the new policy. Today, the WTO authorized those nations to impose over $1 billion in trade sanctions annually against the United States until it weakens or ends COOL.

Past administrations have repealed or weakened U.S. policies to comply with trade agreements.  Today’s ruling comes two weeks after the WTO ruled that U.S. “dolphin-safe” tuna labeling, which allows consumers to choose tuna caught without dolphin-killing fishing practices, was a “technical barrier to trade” that must be eliminated or weakened.

The WTO’s ruling comes at an inopportune time for the Obama administration, as it attempts to sell the recently completed TPP. The recent release of the final TPP text reveals that it would impose limits on food safety that extend beyond the WTO rules. This includes requirements that the United States permit food imports from exporting countries that claim their safety regimes are “equivalent” to our own, even if doing so violates key principles of U.S. food safety policy. These rules effectively would outsource the inspection of food consumed by Americans to other countries. The TPP also would allow new challenges of food safety border inspections.

Background: Congress enacted mandatory country-of-origin labeling for meat in the 2008 farm bill. This occurred after 50 years of U.S. government experimentation with voluntary labeling and efforts by U.S. consumer groups to institute a mandatory program.

Canada and Mexico claimed that the program violated WTO limits on what sorts of product-related “technical regulations” WTO signatory countries are permitted to enact. In November 2011, the WTO issued an initial ruling against COOL. Canada and Mexico demanded that the United States drop its mandatory labels and return to a voluntary program that would not provide U.S. consumers the same level of information as the current labels. The United States appealed.

In June 2012, the WTO Appellate Body affirmed that COOL violated WTO rules. In response, the U.S. government altered the policy. However, instead of watering down the popular program as Mexico and Canada sought, the U.S. Department of Agriculture’s new May 2013 rule strengthened the labeling regime. By providing more information to consumers, the new rule remedied the violations cited in the WTO ruling. Mexico and Canada then challenged the new U.S. policy. In May 2015, the WTO ruled that the new U.S. policy still violated WTO rules. Mexico and Canada initiated a WTO process to determine the level of trade sanctions that they could impose on the United States until it eliminated or weakened COOL.

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