	Recent COOL Developments

On May 18, 2015, the World Trade Organization's (WTO) Appellate Body confirmed the findings of previous panels that U.S. country-of-origin labeling (COOL) for beef and pork violated U.S. WTO obligations by discriminating against imported livestock. In June 2015, Canada and Mexico requested permission from the WTO to impose about US$3 billion in concessions, in the form of retaliatory tariffs, against products imported from the United States. The United States objected to the request, and an arbitration panel was established to determine the appropriate level of concessions. On December 7, 2015, the arbitration panel released its report, which found that Canada could request retaliation of C$1.055 billion (US$781 million) and Mexico US$228 million. 2393 ) passed in June 2015, the repeal language in P.L. Canada and Mexico have stated that they are pleased with the repeal of COOL. Although the threat of retaliation now has been removed, Canada and Mexico are likely to retain the authority to retaliate until USDA formally rescinds existing COOL regulations for beef and pork, and until Canada and Mexico are assured that cattle and hog trade is unimpeded as the repeal of COOL is implemented. On March 2, 2016, USDA issued the final rule to amend COOL regulations for beef, pork, and ground beef and pork by striking all references to beef and pork. 114-113 . 107-171 , §10816). These amendments were incorporated into P.L. ):
applies to ground and muscle cuts of beef (including veal), lamb, and pork, fish and shellfish, peanuts, "perishable agricultural commodities" as defined by the Perishable Agricultural Commodities Act (i.e., fresh and frozen fruits and vegetables), goat meat, chicken, pecans, macadamia nuts, and ginseng (these are referred to as "covered commodities"); requires method of production information (farm-raised or wild-caught) for fish and shellfish to be noted at the final point of sale to consumers; exempts these items if they are an ingredient in a processed food; covers only those retailers that annually purchase at least $230,000 of perishable agricultural commodities, and requires them to inform consumers of origin "by means of a label, stamp, mark, placard, or other clear and visible sign on the covered commodity or on the package, display, holding unit, or bin containing the commodity at the final point of sale"; and exempts from these labeling requirements such "food service establishments" as restaurants, cafeterias, bars, and similar facilities that prepare and sell foods to the public. For covered red meats and chicken, the COOL law:
permits the U.S. origin label to be used only on meats from animals that were exclusively born, raised, and slaughtered in the United States, with an exception for those animals present here before July 15, 2008; permits meats or chicken with multiple countries of origin to be labeled as being from all of the countries in which the animals may have been born, raised, or slaughtered; requires meat or chicken from animals imported for immediate U.S. slaughter to be labeled as from both the country the animal came from and the United States; requires products from animals not born, raised, or slaughtered in the United States to be labeled with their correct country(ies) of origin; and requires , for ground meat and chicken products, that the label list all countries of origin, or all "reasonably possible" countries of origin. It then found that the COOL measure (1) treated imported livestock less favorably than "like domestic livestock," particularly in the labeling of muscle cut meats (beef and pork), in violation of the national treatment obligation in the TBT's Article 2.1; and (2) failed to meet the legitimate objective of providing information to consumers on the origin of meat products, and thus violated the TBT's Article 2.2. The U.S. meat sector expressed mixed reactions. The AB, however, reversed the DS panel's finding that COOL does not fulfill its legitimate objective to provide consumers with information on origin. However, the AB did not determine if COOL was more trade restrictive than necessary. Once WTO findings are adopted by the DSB, a compliance deadline is established. On May 24, 2013, the United States notified the WTO Dispute Settlement Body (DSB) that it had complied with the WTO findings on COOL. Both Canada and Mexico argued that USDA's May 23, 2013 revised COOL rule fails to bring the United States into compliance with its WTO obligations. The compliance panel issued its report on October 20, 2014. Although the panel found that COOL is a legitimate objective, it found that the manner in which COOL is implemented treats imported livestock unfavorably. Congress Repeals COOL for Beef and Pork

On December 18, 2015, in response to the WTO arbitration panel's decision to allow Canada and Mexico to retaliate against imported products from the United States, Congress used the annual appropriations process to permanently repeal COOL for beef and pork and their ground products. Section 759 of the enacted Consolidated Appropriations Act, 2016 ( P.L. 114-113 , Division A). Appellate Body on the Dispute Panel Report
The United States appealed the DS panel's finding that COOL treats imported livestock less favorably than domestic livestock (i.e., that COOL is inconsistent with TBT's Article 2.1). To determine if the revised rule was more trade restrictive than necessary, the panel examined the risks of not fulfilling the objective of COOL and examined four alternative labeling schemes, provided by Canada and Mexico, that would demonstrate that the revised COOL rule was more trade restrictive than necessary.
Since the final rule to implement country-of-origin labeling (COOL) took effect in March 2009, most retail food stores have been 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 were required by the 2002 farm bill (P.L. 107-171) as amended by the 2008 farm bill (P.L. 110-246). COOL for beef and pork resulted in a World Trade Organization (WTO) dispute settlement case with Canada and Mexico that started in 2009 and finally concluded in 2015.
Canada and Mexico challenged U.S. COOL in the WTO, arguing that COOL had 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 panel found that COOL treated imported livestock less favorably than U.S. livestock, and did 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 panel's finding that COOL treated imported livestock less favorably than domestic livestock. But the AB reversed the finding that COOL did not fulfill its legitimate objective to provide consumers with information on origin. The United States welcomed the WTO's affirmation of the 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 compliance deadline of May 23, 2013, USDA issued a revised COOL rule requiring that labels show where each production step (born, raised, slaughtered) occurred and prohibited 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.
In September 2013, a compliance panel was formed to determine if the revised COOL rule complied with WTO agreements. On October 20, 2014, the panel found that the revised COOL rule treated imported livestock less favorably than domestic livestock. The panel confirmed that COOL was a legitimate objective, but could not determine if the rule was more trade restrictive than necessary. The United States appealed the compliance panel findings in November 2014, and the AB heard the appeal in February 2015. The AB report, released in May 2015, again found that COOL violated U.S. WTO obligations.
On June 4, 2015, Canada and Mexico requested authorization to retaliate against U.S. imported products in the amount of US$3 billion. The United States objected to the requests, and on September 15-16, 2015, an arbitration panel met to determine the appropriate level of retaliation. On December 7, 2015, the arbitration panel set the retaliation levels at C$1.055 billion (US$781 million) for Canada and at US$228 million for Mexico.
On December 18, 2015, Congress repealed the COOL requirements for beef and pork and ground beef and pork in the enacted Consolidated Appropriations Act, 2016 (P.L. 114-113). After the repeal by Congress, USDA halted enforcement of COOL for beef and pork.
On December 21, 2015, the WTO authorized Canada and Mexico to retaliate against products imported from the United States. Canada and Mexico stated that they were pleased with the repeal of COOL but will retain the authority to retaliate until they are assured that cattle and hog trade is unimpeded as the repeal of COOL is implemented.
On March 2, 2016, USDA issued a final rule that amended the COOL regulations to bring them into conformity with P.L. 114-113. Congressional repeal of COOL for beef and pork and the amended regulations have brought the United States into compliance with its WTO obligations.