The United States lost the bulk of its appeal against a World Trade Organization ruling on meat labeling rules on Friday, meaning it may have to stop forcing retailers to display the country of origin on meat they sell.
The WTO Appellate Body said the U.S. country-of-origin labeling rules, commonly known as COOL, were wrong because they gave less favorable treatment to beef and pork imported from Mexico and Canada, which brought the case, than to U.S. meat.
The decision gives the United States time to comply and does not immediately alter the labeling rules.
The meat labels became mandatory in March 2009 after years of debate. U.S. consumer and mainline farm groups supported the requirement, saying consumers should have information to distinguish between U.S. and foreign products.
Big meat processors opposed the provision, which they said would unnecessarily boost costs and disrupt trade.
A WTO panel ruled in November that the labeling provision violated WTO rules on technical barriers to trade.
The U.S. labeling law requires grocers to put labels on cuts of beef, pork, lamb, chicken and ground meat or post signs that list the origin of the meat.
To be listed as U.S. origin, meat must come from animals born, raised and slaughtered in the United States. Meat from livestock raised in Mexico or Canada for slaughter in the United States must be labeled as a product of mixed origin. Canada and Mexico have sizeable cattle and hog trade with the United States.
Many U.S. meat-packing plants, especially those near the U.S.-Canada border, either stopped accepting Canadian livestock or bought less due to the increased costs of segregating animals by domestic and foreign origin.
Changing the law would most affect packing plants that were once big buyers of Canadian animals, including those owned by JBS, Tyson Foods, Cargill Inc., Hormel Foods and Smithfield Foods, Canadian farm industry officials have said.
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