(UPDATED COVERAGE, Dec. 1) Sparking calls from U.S. retailers to repeal the law, a World Trade Organization dispute panel has ruled that the U.S. country of origin labeling law is inconsistent with U.S. trade obligations.

WTO panel spikes U.S. law on COOLThe WTO dispute panel — which did not speak to the law’s application to fresh produce — found the U.S. labeling law gives less favorable treatment to Canadian cattle and hogs in comparison with U.S. with domestic livestock and thus violates trade agreements. What’s more, the WTO dispute panel said mandatory country of origin labeling does not fulfill its objective of providing consumers with information on origin.

The Food Marketing Institute issued a statement by the group’s regulatory counsel Erik Lieberman that called for an end to the law.

“The World Trade Organization (WTO) recognized what the supermarket industry has known all along — that COOL is a protectionist law designed to make it more costly and difficult for retailers to sell imported foods,” Lieberman said. “COOL has forced the industry to spend tens millions of dollars each year on unnecessary regulatory burdens all for little or no benefit to consumers.”

Despite high rates of compliance with the law Lieberman said the COOL law has become more of a burden than ever, and makes it challenging for retailers to carry imported produce.

“The COOL law will need to be repealed or rewritten in order for the U.S. to meet its obligations to global trading partners,” Lieberman said in the FMI statement. “We look forward to working with Congress and the U.S. Department of Agriculture to develop an alternative system, onethat will provide useful information to consumers and put our nation in compliance with international trade agreements.”

Dan Sutton, director of produce procurement for Boise, Idaho-based grocer Albertsons LLC, said it doesn’t make sense for the government to spend millions on country of origin labeling enforcement.

“There is a cost of maintaining the program, and when you look at the expense that the U.S. government pays to the state inspectors, they sure spend a lot of money to validate that.”
Sutton said retailers should provide origin information if consumers want it, but he doesn’t see the need for a law that requires the expense of paying for inspectors.

There was no immediate call to repeal the law from U.S. produce groups.

“PMA recognizes there are alternative views regarding country of origin labeling. Right now, we are reviewing the WTO ruling with a keen eye on what it truly means to the produce industry,” said Glenn Boyet, senior director of public relations for the Newark, Del.-based Produce Marketing Association.

Although the panel disagreed with the how the U.S. implemented the law, the Office of the U.S. Trade Representative said the WTO dispute panel affirmed the right to require country of origin labeling on meat products.

“We remain committed to providing consumers with accurate and relevant information with respect to the origin of meat products that they buy at the retail level,” Andrea Mead, press secretary for the Office of the U.S. Trade Representative said in a statement. “In that regard we are considering all options, including appealing the panel’s decision.”

The USTR said the next step in the process is for the reports to be adopted by the WTO Dispute Settlement Body or appealed to the WTO Appellate Body.