Country Of Origin Labeling For Foods

This is a print on demand edition of a hard to find publication. Many retail food stores are now required to inform consumers about the country of origin of fresh fruits and vegetables, seafood, peanuts, pecans, macadamia nuts, ginseng, and ground and muscle cuts of beef, pork, lamb, chicken, and goat. Contents of this report: (1) Recent Developments; (2) Background; (3) Other Laws with Labeling Provisions: Tariff Act; Meat and Poultry Products Inspection Acts; Federal Food, Drug, and Cosmetic Act; (4) Implementation of Farm Bill COOL Requirements; (5) Key Provisions: Record-Keeping, Verification, and Penalties; (6) Economic and Trade Issues: Costs and Benefits; North Amer. Livestock Trade; U.S. Livestock Imports; (7) Expansion of COOL in Food Safety Measures; COOL for Dairy Products. Illustrations.

Most retail food stores are now required to inform consumers about the country of origin of fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng, and ground and muscle cuts of beef, pork, lamb, chicken, and goat. The rules are required by the 2002 farm bill (P.L. 107-171) as amended by the 2008 farm bill (P.L. 110-246). Other U.S. laws have required such labeling, but only for imported food products already pre-packaged for consumers. The final rule to implement country-of-origin labeling (COOL) took effect on March 16, 2009. Both the authorization and implementation of COOL by the U.S. Department of Agriculture (USDA) have been controversial, particularly the labeling rules for meat and meat products. A number of livestock and food industry groups continue to oppose COOL as costly and unnecessary, and they and the main livestock exporters to the United States—Canada and Mexico—view the requirement as trade-distorting. Others, including some cattle and consumer groups, maintain that Americans want and deserve to know the origin of their foods. Canada and Mexico challenged U.S. COOL in the World Trade Organization (WTO), arguing that COOL has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market, thus violating WTO trade commitments. In November 2011, the WTO dispute settlement (DS) panel found that (1) COOL treats imported livestock less favorably than U.S. livestock, and (2) COOL does not meet its objective to provide complete information to consumers on the origin of meat products. In March 2012, the United States appealed the WTO ruling. In June 2012 the WTO's Appellate Body (AB) upheld the DS panel's finding that COOL treats imported livestock less favorably than domestic livestock. But the AB reversed the finding that COOL does not fulfill its legitimate objective to provide consumers with information on origin. The Obama Administration welcomed the AB's affirmation of the U.S. right to adopt labeling requirements to inform consumers on the origin of their meat. Participants in the U.S. livestock sector had mixed reactions, reflecting the ongoing heated debate on COOL. In order to meet a May 23, 2013 compliance deadline, USDA issued a revised COOL rule requiring that labels show where each production step (born, raised, slaughtered) occurs and prohibiting the commingling of muscle-cut meat from different origins. COOL's supporters applauded the revised rule for providing consumers with specific, useful information on origin. Canada and Mexico expressed disappointment with USDA's revised rule. In September 2013, a compliance panel was formed to determine if the revised COOL rule complies with WTO agreements. On October 20, 2014, the panel found that the revised COOL rule altered competition and thus treated imported livestock less favorably than domestic livestock. The panel confirmed that COOL is a legitimate objective, but could not determine if the rule was more trade restrictive than necessary. The United States appealed the compliance panel report on November 28, 2014, and the Appellate Body will hear the appeal on February 16 and 17, 2015.

Abstract: This hearing examines the adequacy of current labeling requirements for food imports and discusses whether or not there is a need to expand or reform these labeling requirements. Testimony was received from several federal officials (including representatives from the General Accounting Office, the Customs Service, the Dept. of Agriculture, and the Dept. of Health and Human Services) and numerous corporate and industry representatives. The specific topic of the hearing was country-of-origin labeling.

Most retail food stores are now required to inform consumers about the country of origin of fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng, and ground and muscle cuts of beef, pork, lamb, chicken, and goat. The rules are required by the 2002 farm bill (P.L. 107-171) as amended by the 2008 farm bill (P.L. 110-246). Other U.S. laws have required such labeling, but only for imported food products already pre-packaged for consumers. The final rule to implement COOL took effect on March 16, 2009. Both the authorization and implementation of country-of-origin labeling (COOL) by the U.S. Department of Agriculture's Agricultural Marketing Service have been controversial. Much attention has focused on the labeling rules that now apply to meat and meat products. A number of livestock and food industry groups continue to oppose COOL as costly and unnecessary. They and the main livestock exporters to the United States—Canada and Mexico—view the requirement as trade-distorting. Others, including some cattle and consumer groups, maintain that Americans want and deserve to know the origin of their foods, and point out that many U.S. trading partners have their own import labeling requirements. Less than one year after the COOL rules took effect, Canada and Mexico used the World Trade Organization's (WTO's) trade dispute resolution process to challenge some features that apply to labeling meat. Both countries argued that COOL has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market. For this reason, they argued that COOL violates WTO trade commitments agreed to by the United States. On November 18, 2011, a WTO dispute settlement (DS) panel found that (1) COOL treats imported livestock less favorably than like U.S. livestock (particularly in the labeling of beef and pork muscle cuts), and (2) COOL does not meet its objective to provide complete information to consumers on the origin of meat products. The panel reached these conclusions by examining the economic effects of the measures taken by U.S. livestock producers and meat processors to implement COOL, and by accepting arguments that the way meat is labeled to indicate where the multiple steps of livestock birth, raising, and slaughtering occurred is confusing. On March 23, 2012, the United States appealed the panel report to the WTO Appellate Body (AB). On June 29, 2012, the AB upheld the DS panel's finding that the COOL measure treats imported Canadian cattle and hogs, and imported Mexican cattle, less favorably than like domestic livestock, because of its record-keeping and verification requirements. The AB, however, reversed the panel's finding that COOL does not fulfill its legitimate objective to provide consumers with information on origin. The Obama Administration welcomed the AB's affirmation of the U.S. right to adopt labeling requirements to inform consumers on the origin of the meat they purchase, but did not signal what steps might be considered to address the 'less favorable treatment' finding. Participants in the U.S. livestock sector had mixed reactions, reflecting the heated debate on COOL that occurred over the last decade. Two consumer groups expressed concern that this WTO decision further undermines U.S. consumer protections. If the United States decides to bring COOL into compliance with the AB finding, WTO rules call for that to occur within a reasonable period of time. Options would be to consider regulatory and/or statutory changes to the COOL regulations and/or law. If the United States does not comply, Canada and Mexico would have the right to seek compensation or retaliate against imports from the United States.

This report covers the dispute between the U.S with its neighbors, Canada and Mexico, who say that the recent country-of-origin labeling (COOL) system implemented by the U.S. Department of Agriculture is unfair and does not meet its original objectives. This dispute was brought before the WTO dispute panel and found to be valid. The report ends with a discussion of options for the U.S. in regards to modifying COOL to follow WTO rulings.