US Congress declares COOL law void

US Congress has passed the spending bill that declared country-of-origin labelling (COOL) law as void.

COOL was put into law in the 2002 Farm bill, and was intended to offer greater transparency to consumers on the food they purchase.

Congress bolstered the law in 2013. COOL required imported beef and pork products sold in the US to carry information on packs where the animals were born, raised and slaughtered.

A provision was created in the ‘omnibus’ $1.15tn spending programme to repeal the rule, which caused trading disputes between the US, Mexico and Canada.

The provision had bipartisan support in Congress.

Canada and Mexico challenged the rule with the WTO on grounds that it was discriminatory, and consequently, the world trade body contested the labelling rule twice.

Earlier this month, WTO stated that Canada and Mexico could impose $1.01bn in tariffs on US products in retaliation for its country-of-origin labeling (COOL) law.

The global trade body stated that the law was discriminatory.

Canada could impose a tariff of approximately $781m on US products, while Mexico could seek around $228m.

WTO then said that the rules led to ‘a disproportionate burden on producers and processors of livestock that cannot be explained by the need to provide origin information to consumers’.

Canada and Mexico have long been arguing that the COOL ruling severely impacted their livestock export volume to the US.

According to the two US trading partners, US buyers avoided cattle or hogs from Mexico and Canada in order to cut tracking costs resulting from the COOL law.

Although Canada and Mexico urged the WTO to authorise $3bn in retaliatory tariffs, the global trade body settled on the amount of $1.1bn after using a different methodology to calculate the COOL impact on the economies of the two countries.

The COOL law was backed by ranching groups and consumer groups in the US, which believe that it will make shoppers avoid buying food from countries that do not have stringent safety rules. However, meatpackers felt that it only led to higher costs.