U.S. blocks Canada/Mexico call for WTO panel in meat row

Fri Oct 23, 2009 1:20pm EDT
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By Jonathan Lynn

GENEVA (Reuters) - The United States blocked on Friday requests by Canada and Mexico for World Trade Organization experts to examine new U.S. labeling rules that the two U.S. neighbors say are hurting their meat exports.

Both Canada and Mexico told the WTO's dispute settlement body that U.S. Country of Origin Labeling (COOL) rules -- requiring meat sold in U.S. stores to show which country it comes from -- were damaging North American trade.

"COOL is discouraging U.S. retailers, processors, feedlots and producers from buying Canadian livestock and meat. The negative impact on Canadian beef, pork and cattle exporters has been significant," Canada said in a statement to the dispute body.

It noted that Canada and the United States are each other's biggest agricultural trading partners, with two-way farm trade totaling $37 billion last year.

WTO rules allow the plaintiff in a dispute to reject the first request for a panel. But the requests are likely to go forward to the next meeting of the WTO's dispute settlement body on November 19, when the United States cannot block them again.

Mexico also said its exporters were suffering lower prices and uncertainty because of the COOL rules. But the United States said it believed the new labeling requirements were in line with WTO rules. The meat-labeling dispute is another source of tension in U.S.-Canadian trade relations, already frayed by the U.S. "Buy American" program for government purchases.

The case is also a classic example of a non-tariff barrier -- health, safety or consumer standards that can also result in imports being blocked.

Canada formally relaunched the dispute in May as Canadian producers said the new U.S. rules, tightened by the Obama administration, were hurting pig and cattle sales.   Continued...