The United States has lost a battle with Canada and Mexico over its meat labeling rules, the World Trade Organization said on Monday in a ruling that backed calls to scrap the laws or risk costly trade retaliation.
The WTO panel said the United States must bring its country-of-origin labeling (COOL) into line with global trade laws, rejecting the nation's appeal against an earlier ruling that the requirements illegally discriminate against imported livestock.
The move opens the door to multibillion-dollar trade sanctions against the United States, although U.S. lawmakers have signaled they plan to act to repeal the rules as early as this week.
The labeling rules, which advocates say give consumers critical information about where their meat comes from, require retailers such as grocery stores to label meat with the country where the animal was born, raised and slaughtered.
The U.S. rules have resulted in fewer Canadian pig and cattle exports since 2009, according to the Canadian government. Canada has already published a hit list of potential U.S. targets, including wine, chocolate, ketchup and cereal.
"Unless Congress acts now, Canada and Mexico will put tariffs on dozens of U.S. products," said National Pork Producers Council President Ron Prestage. "That's a death sentence for U.S. jobs and exports."
Republican Michael Conaway, who chairs the House of Representatives Committee on Agriculture, said last week that he was working on legislation to repeal the labeling laws.
Conaway's office says the rules have no impact on food safety and that estimates show they cost the livestock and meat industry billions in compliance costs.
The main beef producers' association agreed that Congress must act quickly.
"We have long said that COOL is not just burdensome and costly to cattle producers, it is generally ignored by consumers and it violates our international trade obligations," said National Cattlemen's Beef Association President Philip Ellis.
But R-CALF USA, a small but vocal lobby group for U.S. cattle producers, said Congress should stand firm.
"Anything less would be an unconscionable surrender of U.S. sovereignty," R-CALF Chief Executive Officer Bill Bullard said.
U.S. Trade Representative Chief Counsel Tim Reif said the ruling was disappointing, although he noted the panel did not find the labeling requirements to be excessively restrictive.
"We are considering all options going forward, and will continue to consult with members of Congress and interested members of the public regarding possible next steps," he said.