- Associated Press - Tuesday, October 21, 2014

(For use by New York Times News Service clients)

c.2014 San Antonio Express-News

By Lynn Brezosky

San Antonio Express-News

The World Trade Organization said Monday a requirement for U.S. meat labels to show where the animals are born, raised and slaughtered gives some producers in this country an unfair trade advantage over those in Mexico and Canada.

“It has a detrimental impact on the competitive opportunities of imported (Canadian and Mexican) livestock and thus accords less favorable treatment,” the WTO said.

The ruling could spark retaliatory tariffs against some U.S. products.

At issue is the U.S. Agriculture Department’s requirement that most muscle cuts of beef, poultry, pork and lamb come with “country of origin labels,” or COOL.

The mandate was an attempt to fix labeling standards that the WTO in 2012 rejected as discriminatory. But opponents of COOL, including South Texas ranchers with mixed herds, said the move to “born, raised and harvested” labels was a step in the wrong direction. Canadian and Mexican producers complained customers would perceive a wholly U.S. product as superior.

Since the ruling took effect last November, meat processors have had to separate animals at every phase of production — from the feedlot to trucking to slaughter and then to cutting, cooling and packaging.

Ranchers accustomed to mixing their herds with young cattle from Mexico found their Mexican-born animals selling for at least $40 less per head. The ranchers say there is no quality difference in the meat.

“Our producers have already suffered discounts and faced the closure of a number of feedlots and packing plants due to the effects of this shortsighted regulation,” said Bob McCan, a Victoria rancher who is president of the National Cattlemen’s Beef Association.

Pleasanton rancher Ty Keeling said the WTO ruling wasn’t much comfort to him.

“At the end of the day, are they going to listen and change the rule back to where there was no rule, or a rule that makes sense?” Keeling asked.

The beef industry fought hard to get the labeling requirement repealed. In July, the full U.S. Court of Appeals rejected an argument the labels violated producers’ First Amendment rights by requiring them to make statements against their will.

Consumer groups and many smaller, niche livestock producers have applauded the labels as a way of better informing consumers. They were not happy with the WTO decision Monday.

“Basic information about the origin of our food should not be considered a barrier to trade,” said Chris Waldrop of the Consumer Federation of America. “Today’s decision flies in the face of the overwhelming numbers of U.S. consumers who want more information.”

USDA spokesman Sam Jones-Ellard said the department was “disappointed” with the WTO’s finding.

“USDA will continue to work with the Office of the U.S. Trade Representative as we consider all options for responding … while complying with the labeling law Congress enacted,” Jones-Ellard said.

The Canadian government has already put out a list of commodities that could be subject to retaliatory tariffs. It includes not only livestock and meat, but also cheeses, apples and cherries, maple syrup, chocolate, jewelry, piping, wine and office furniture.

It was unclear Monday whether Mexico had produced a list.

John Dillard, a Washington, D.C.-based attorney who specializes in agriculture law, said the U.S. will likely appeal, which would delay sanctions until the first quarter of 2016.

“Hopefully, Congress will take action on this matter instead of waiting on an appeal,” Dillard said. “However, even if Congress does not take action until this appeal is final, I do believe that they will scrap or significantly amend COOL rather than being responsible for allowing the retaliatory tariffs to take hold.”

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