On October 20, 2014, a World Trade Organization (“WTO”) Compliance Panel ruled that the U.S. Department of Agriculture’s (“USDA’s”) revised country-of-origin labeling (“COOL”) regulations for meat are inconsistent with U.S. obligations under the WTO.  The panel found the amended rulings – which were revised to include information about where each of the production steps, including birth, slaughtering and packaging, take place – actually increased the discriminatory effect against imported livestock from Canada and Mexico.

While the United States Trade Representative decides what steps it will take in response to the ruling – including filing an appeal or seeking a settlement – industry groups are calling for the U.S. to bring COOL regulations into compliance before Canada and Mexico are permitted to seek compensation in the form of applying a retaliatory surtax – up to 100 percent – against certain U.S. commodities.  No action has been authorized as of yet, however, Canada and Mexico have each indicated specific U.S. products that could be subject to retaliation – including numerous food products, steel products and consumer goods, such as jewelry and certain furniture items.

KDW’s International Trade group will continue to monitor COOL developments related to compliance with or changes to the current COOL regulations, as well as updates on retaliation against specific U.S. exports. Please consider sharing this advisory with your clients and contacts who import meat products (beef and pork) that are subject to COOL, or export products that are the target of retaliation (a list is provided in the advisory).

Click here to read the complete advisory.