Country of Origin Labeling

The USDA Agricultural Market Service is in charge of Country of Origin Labeling (COOL). COOL requirements were passed under the 2002 and 2008 Farm Bills. Regulations implementing each part of the legislation are divided by the type of covered commodity and were finalized years later, some not becoming effective until 2009.^[1] COOL is required for fish and shellfish,^[2] beef, veal, pork, lamb, chicken, goat, fresh and frozen fruit and vegetables (called Perishable Agricultural Commodities), macadamia nuts, pecans, peanuts, ginseng,^[3] and honey. ^[4] COOL designations must be made to reflect where an animal was born, raised, and slaughtered so labels may designate up to three countries.^[5] Processed foods with these ingredients such as hot dogs and fish sticks, and cooked versions of the covered commodities, such as roasted peanuts and canned tuna,^[6] are exempt from COOL requirements.^[1]

Retailers licensed under the Perishable Agricultural Commodities Act^[5] are required to provide COOL information through a typed, handwritten, or printed placard, sign, label, sticker, band, twist tie, pin tag, or other display.^[9] Retailers and their suppliers are required to keep records upon which the COOL disclosure is based. Food service establishments are exempt from COOL requirements.^[1]

COOL labeling is quite controversial. The USDA states that the “program is neither a food safety or traceability program but rather a consumer information program.”^[5] Proponents argue that COOL provides valuable information to consumers. Opponents argue that there is no strong evidence that consumers want this information, the costs to industry outweigh any interest in this information, it is a form of American protectionism, and it potentially undermines efforts to reduce trade barriers.^[1] One impetus for COOL labeling seems to be based on concerns regarding past and future disease outbreaks from infected imported foods. These concerns relate to safety and might be akin to a criticism of the USDA’s importation inspection controls.^[13]

In 2009, Canada and Mexico challenged the COOL laws at the World Trade Organization (WTO), arguing that they distort trade by reducing the value and number of livestock shipped to the U.S. market, thereby violating WTO trade agreements by the United States.^[14] The WTO established a panel to hear the complaints. In 2011, the WTO dispute settlement panel ruled that certain COOL requirements violate U.S. WTO commitments. The United States appealed and the appellate body found that the COOL laws partially violated the Technical Barriers to Trade (TBT) Agreement.^[15] The United States informed the WTO Dispute Settlement Body that its final regulations corrected the violations of the TBT Agreement, bringing it into compliance with the findings of the Dispute

Settlement Body.^[16] Canada disagreed, so compliance proceedings followed and a compliance panel was convened. Hearings were held, and in 2014, the WTO again ruled against the United States. In November 2014, the United States appealed this decision.^[17]

After the USDA issued final regulations that required more precise information, a group of trade associations representing livestock producers, feed- lot operators, and meat packers sued the USDA in U.S. federal district court, arguing that the regulation violated the original authorizing legislation and the First Amendment.^[18] The case made its way to the federal appellate court, which acknowledged that the revised rules will have greater cost implications for the plaintiffs, but found that the government acted within its constitutional authority.^[18] The court upheld the disclosure requirements under Zauderer, finding that addressing deception is not the only valid government rationale for a factual disclosure requirement.^[18] The court determined that the government’s interests in COOL labeling were substantial: “to enable consumers to choose American-made products; the demonstrated consumer interest in extending country-of-origin labeling to food products; and the individual health concerns and market impacts that can arise in the event of a food-borne illness outbreak.”^[21] The court thus found that COOL labeling was reasonably related to the government’s interests, satisfying the Zauderer test, and not just enacted to satisfy consumer curiosity.

• [1] Congressional Research Service. Country-of-Origin Labeling for Foods and the WTOTrade Dispute on Meat Labeling. September 16, 2013. http://fas.org/sgp/crs/misc/RS22955.pdf
• [2] 7 CFR 60.300
• [3] 7 CFR 65.400
• [4] 7 CFR 52.54
• [5] United States Department of Agriculture. Country of Origin Labeling for Meat andChicken. http://www.fsis.usda.gov/wps/portal/fsis/topics/food-safety-education/get-answers/food-safety-fact-sheets/food-labeling/country-of-origin-labeling-for-meat-and-chicken/country-of-origin-labeling-for-meat-and-chicken
• [6] United States Department of Agriculture. Cool. Country of Origin Labeling. Retailers andConsumers. October 2009. http://www.google.com/url?sa=t&xct=j&q=&esrc=s&source=web&cd=5&cad=rja&uact=8&ved=0CDwQFjAE&url=http%3A%2F%2F www.ams.usda.gov%2FAMSv1.0%2Fgetfile%3FdDocName%3DSTELPRDC5076163&ei=3QTdU-reB9GLyATLrYGgDw&usg=AFQjCNHwXOe8nwOW-uRKJfRBDKoRGkFl_g&sig2=IYxlq6AF0Uk1m861ey88lg&bvm=bv.72197243,d.aWw
• [7] Congressional Research Service. Country-of-Origin Labeling for Foods and the WTOTrade Dispute on Meat Labeling. September 16, 2013. http://fas.org/sgp/crs/misc/RS22955.pdf
• [8] United States Department of Agriculture. Country of Origin Labeling for Meat andChicken. http://www.fsis.usda.gov/wps/portal/fsis/topics/food-safety-education/get-answers/food-safety-fact-sheets/food-labeling/country-of-origin-labeling-for-meat-and-chicken/country-of-origin-labeling-for-meat-and-chicken
• [9] 7 CFR 65.400; 7 CFR 60.300
• [10] Congressional Research Service. Country-of-Origin Labeling for Foods and the WTOTrade Dispute on Meat Labeling. September 16, 2013. http://fas.org/sgp/crs/misc/RS22955.pdf
• [11] United States Department of Agriculture. Country of Origin Labeling for Meat andChicken. http://www.fsis.usda.gov/wps/portal/fsis/topics/food-safety-education/get-answers/food-safety-fact-sheets/food-labeling/country-of-origin-labeling-for-meat-and-chicken/country-of-origin-labeling-for-meat-and-chicken
• [12] Congressional Research Service. Country-of-Origin Labeling for Foods and the WTOTrade Dispute on Meat Labeling. September 16, 2013. http://fas.org/sgp/crs/misc/RS22955.pdf
• [13] Daniel J. Ikenson. Uncool Rules: Second Thoughts on Mandatory Country of OriginLabeling. Cato Institute. January 16, 2004. http://www.cato.org/publications/free-trade-bulletin/uncool-rules-second-thoughts-mandatory-country-origin-labeling
• [14] Congressional Research Service. Country-of-Origin Labeling for Foods and the WTOTrade Dispute on Meat Labeling. September 16, 2013. http://fas.org/sgp/crs/misc/RS22955.pdf.
• [15] World Trade Organization. Dispute Settlement: Dispute DS384. United States — CertainCountry of Origin Labelling (COOL) Requirements. http://www.wto.org/english/tratop_e/dispu_e/cases_eAds384_e.htm
• [16] World Trade Organization. Dispute Settlement: Dispute DS384. United States — CertainCountry of Origin Labelling (COOL) Requirements. http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds384_e.htm
• [17] Damian Paletta, Paul Vieira. U.S. Appeals WTO Meat-Label Ruling Canadian OfficialsImplore U.S. to 'Live Up to International Trade Obligations.’ The Wall Street Journal. November 28,2014. http://www.wsj.com/articles/u-s-appeals-wto-meat-label-ruling-1417209053
• [18] American Meat Institute v. United States Department of Agriculture. 2014 U.S. App. LEXIS14398 (D.C. Cir. July 29, 2014).
• [19] American Meat Institute v. United States Department of Agriculture. 2014 U.S. App. LEXIS14398 (D.C. Cir. July 29, 2014).
• [20] American Meat Institute v. United States Department of Agriculture. 2014 U.S. App. LEXIS14398 (D.C. Cir. July 29, 2014).
• [21] American Meat Institute v. United States Department of Agriculture. 2014 U.S. App. LEXIS14398 (D.C. Cir. July 29, 2014) at *12.