A World Trade Organization arbitrator has given the United States until May 23, 2013, to comply with a WTO dispute ruling faulting U.S. country-of-origin labeling (COOL) requirements for meat.
In a Dec. 4 decision, the WTO arbitrator, former Appellate Body Judge Giorgio Sacerdoti, rejected U.S. requests for a longer time frame to ensure compliance. The United States had asked for a January 2014 deadline to comply with the WTO’s findings, arguing that it needed the extra time in the event it determined that implementation would require regulatory changes.
Canada and Mexico, the complainants in the dispute, argued that the United States should be given until January 2013 and March 2013 respectively to implement the WTO’s findings.
Canadian International Trade Minister Ed Fast and Agriculture Minister Gerry Ritz issued a joint statement welcoming the arbitrator’s decision.
“We are particularly pleased that the arbitrator determined a reasonable period of time close to that proposed by Canada and Mexico, as opposed to the much longer period suggested by the United States,” the Canadian ministers declared.
2008 Farm Bill Targeted
The Canadian and Mexican complaint targeted the U.S. Food, Conservation and Energy Act of June 2008 (the 2008 Farm Bill) and implementing rules imposing mandatory country-of-origin labeling for beef, chicken, lamb, pork, and goat meat, and certain perishable commodities sold at retail outlets in the United States.
The WTO’s Appellate Body ruled June 29 the COOL rules violate Article 2.1 of the WTO’s Agreement on Technical Barriers to Trade (TBT Agreement) by treating imported livestock from Mexico and Canada less favorably than U.S. livestock.
Article 2.1 requires WTO members to ensure that, with respect to technical regulations, products imported from any WTO member be accorded treatment no less favorable than products of national origin.
“Given that the least costly way of complying with these requirements is to rely exclusively on domestic livestock, the COOL measure creates an incentive for US producers to use exclusively domestic livestock and thus has a detrimental impact on the competitive opportunities of imported livestock,” the Appellate Body declared.
The ruling was formally adopted by the WTO’s Dispute Settlement Body on July 23. The parties in the dispute were unable to agree among themselves on a deadline for the United States to comply with the ruling, prompting Canada and Mexico to request WTO arbitration Sept. 13 to determine the deadline.
Rejection of U.S. Timetable
The United States argued that a change to the COOL measure could involve legislative action followed by regulatory action, or could involve only regulatory action. In any event, the quickest time frame within which the United States would normally be able to complete all of the necessary steps to publish a modified final rule would be at least 12 months from the date of the ruling’s adoption, it argued.
In addition, because the COOL measures were found to constitute a technical barrier to trade, Article 2.12 of the TBT Agreement—as clarified by the Appellate Body in its April 4 ruling condemning the U.S. ban on clove cigarettes—gives WTO members at least six months between the publication of the modified regulation and its entry into force to ensure compliance.
Sacerdoti, however, said Article 2.12 “does not justify granting additional time in this case.”
“Given the flexibilities available in respect of the rulemaking process, I have determined that eight months (from the date of adoption) should suffice for the United States to adopt a modified COOL regulation,” the arbitrator said. “In addition, I have concluded that two months should be allowed between the publication of the regulation and its entry into force.”
As for the extra six months under Article 2.12 of the TBT, the WTO arbitrator noted that the minimum six months fixed under the provision is intended to give producers in exporting countries time to adapt their products or methods of production to the requirements of the importing member, not to “prolong the application of an existing measure that has been found to discriminate against the same producers.”
As a result, Article 2.12 “does not prevent the United States from putting the modified COOL regulation into force within a shorter timeframe or even upon publication, considering that Canada and Mexico have stated that their producers would need no time to adapt their products and production methods to the modified COOL regulation,” Sacerdoti declared.