Austrialian COOL is WTO Friendly?


by DTN's Washington Insider

Earlier this week, the National Pork Producers Council and 34 state pork producer organizations wrote to urge the Senate to take up legislation to repeal country-of-origin labeling requirements for beef, pork and poultry. They want the repeal done before Congress leaves town for its month-long recess beginning in early August.

The U.S. COOL law requires meat to be labeled with its source country, including details regarding where the animal was born, raised and processed. COOL rules also apply to fish, shellfish, fresh and frozen fruits and vegetables and certain nuts.

Last May, the World Trade Organization rejected an appeal by the United States of the international trade body's October 2014 ruling that COOL provisions discriminate against Canadian and Mexican animals. That decision allows Canada and Mexico to place retaliatory tariffs on U.S. imports.

While the House already has voted to repeal COOL, the Senate has not. The NPPC and the state pork associations say they are concerned that without swift repeal, Congress will imperil U.S. exports and jobs since Canada and Mexico are requesting large sanctions. Canada wants some $3 billion Canadian dollars, while Mexico is requesting $713 million.

In the meantime, an additional wrinkle in the debate has emerged in the form of new Australian country-of-origin labels for food products that will become mandatory in 2016. The Australians say that their program will not breach their WTO obligations and will provide information that the U.S. COOL program does not.

The new mandatory labels will include a bar chart and text to show the approximate proportion of the ingredients that are from Australia. There will be six versions of the bar chart, ranging from “Made in Australia from 0 percent Australian ingredients” to “Made in Australia from 100 percent Australian ingredients.” By contrast, meat can gain a “Product of the U.S.” label only if it comes from animals born, fed and processed in the United States.

The Aussie mandatory labels require only that the Australian content of food be listed. However, the labels also include a version for “grown-in” country-of-origin claims if, for example, an apple producer in Chile wanted to label its fruit as “grown in Chile.”

In addition to the mandatory labels, companies will be encouraged to provide additional information on the origin of significant ingredients, using a bar chart and text. An information sheet gives the example of a non-mandatory label that says “Made in Australia from Canadian pork,” in which the bar chart is empty, and a label that says “Made in Australia from Australian milk,” in which the bar chart is almost fully colored gold.

At this point, the Australian labels seem quite different from the U.S. version of COOL by showing what the foreign content is and reporting that information to consumers interested enough to scrutinize the labels.

However, while the Australian program may prove less costly and intrusive and require less or perhaps no segregation by place of origin, it nevertheless could harm imports. For example, there is an implied need to keep track of animals imported as feeders and their share of “domestic content” which would be something of a burden, too, and could possibly be opposed by livestock exporters as discriminatory.

As a result, it will be important to see whether exporters choose to make a case against the Australian program as they did against the U.S. COOL system. And it remains to be seen whether U.S. COOL opponents can succeed in getting the Senate to vote to end the program as the House did, and to do so quickly enough to douse any interest in attempting an Aussie-COOL approach here, a steps that likely would simply prolong the labeling fight, Washington Insider believes.



Source:  DTN's Washington Insider



Cattle by John Loo, on Flickr
Creative Commons Creative Commons Attribution 2.0 Generic License   by  John Loo 

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