Question Period Note: U.S. COUNTRY-OF-ORIGIN LABELLING (COOL)

1. Canada firmly oppose any new proposals from the U.S. to resurrect mandatory country-of-origin labeling for beef and pork.
2. We work closely with our Embassy and allies across the U.S. to examine any proposed labeling measures to ensure that they do not restrict or disrupt supply chains.
3. We believe this issue has been fully litigated at the World Trade Organization (WTO), and Canada expects that the U.S. will continue to abide by this ruling and its WTO obligations.

BACKGROUND:

• Mandatory country-of-origin labeling (COOL) was implemented in the U.S. in September 2008, and had a significant negative impact on the Canadian cattle and hog industries. In December 2008, Canada (and separately, Mexico) initiated dispute settlement proceedings at the World Trade Organization (WTO) on the COOL requirements for beef and pork. The WTO found, on four separate occasions, that COOL discriminated against imports of Canadian (and Mexican) livestock and was in violation of the U.S.’s trade obligations.

• On December 21, 2015, the WTO granted final authorization for Canada to retaliate up to C$1.055 billion annually (and Mexico up to US$228 million) on U.S. exports to Canada.

• On December 18, 2015, U.S. Congress passed legislation which repealed the COOL requirements for beef and pork. On March 2, 2016, the U.S. Department of Agriculture (USDA) published a Final Rule to amend the implementing regulations for COOL to reflect the repeal for beef and pork.

• Despite the WTO victories and the subsequent repeal of COOL for beef and pork, there remains a strong desire by some in the U.S. industry for mandatory COOL. Multiple actions have been taken since 2015, at both the federal and state levels, in an attempt to enact the same or similar requirements. Recently, more attempts are being made with respect to voluntary measures, instead of mandatory measures, in part due to the WTO rulings.

• There continues to be activity in the U.S. (i.e., in Congress, certain state legislatures) to attempt to introduce voluntary or mandatory COOL schemes that could restrict trade.

• In response to several petitions on the voluntary “Product of USA” label in recent years as well as increased interest in Congress, on July 1, 2021, the United States Department of Agriculture (USDA) issued a statement that it will be conducting a “top-to-bottom” review of “Product of USA” meat labels. The statement notes that USDA will be consulting with its trading partners. The “top-to-bottom” review has also been referenced several times by the White House since then, including in January 2022, indicating that the review has a “goal of new rulemaking to clarify “Product of USA” standards”. No timeframe has been given for this review.

• On September 17, 2021, four Senators introduced a bill to reintroduce mandatory COOL. This legislation would require the U.S. Trade Representative, in consultation with the U.S. Secretary of Agriculture, to develop a WTO-compliant means of reinstating mandatory COOL for beef within one year of enactment. A similar bill was introduced in the House by two Representatives on March 30, 2022. These latest proposed bills are not expected to advance in Congress, but it signals the growing interest to look at changes related to COOL.

• The Government of Canada’s approach is to work closely with key allies and otherwise, remain responsive on the matter to not fuel the COOL rhetoric in the U.S.

• Canada must be mindful of existing voluntary “Product of Canada” label guidelines, which have very similar requirements as some proposals in the U.S.

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