U.S. meat processors and packers last week backed World Trade Organization challenges by Mexico and Canada of a U.S. law mandating country-of-origin labeling of meat including beef and pork, asserting that the COOL provisions violate U.S. international trade obligations, while U.S. cattle groups rebutted those claims.
       
       In comments submitted to the Office of the U.S. Trade Representative (USTR) on Jan. 8, the American Meat Institute (AMI), which represents meat packers and processors and has long opposed the mandatory COOL law, says the law violates several provisions of the North American Free Trade Agreement (NAFTA) in addition to WTO commitments at the center of the Mexican and Canadian challenges.
       
       Conversely, the U.S. Cattlemen's Association and the National Farmers Union (NFU) submitted joint comments on Jan. 8 that seek to counter the claims made in the WTO case. Those groups argue that COOL is "fully consistent" with the General Agreement on Tariffs and Trade (GATT) and the Agreement on Technical Barriers to Trade (TBT), and is not within the scope of the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) nor the Agreement on Rules of Origin.
       
       Backing the Mexican and Canadian claims, AMI argues COOL violates several provisions of these WTO agreements by discriminating against imports in favor of domestic meat.
       
       In their joint submission, the Cattlemen's Association and NFU offer a lengthy defense of COOL against the Canadian and Mexican claims that it violates national treatment obligations under GATT Article III:4 by treating domestic meat better than imports.
       
       "COOL does not discriminate between domestic and imported beef, and it does not accord imported cattle treatment any less favorable than that accorded to domestic cattle," the groups wrote. "COOL is non-discriminatory on its face and operates neutrally in the market place."
       
       The two groups say COOL actually places more stringent labeling requirements on beef from animals slaughtered in the U.S., since domestic beef must bear additional information on where the animal may have been born or raised, whereas beef from Canada and Mexico must only bear the label already required by Customs and Border Protection.
       
       The cattle groups say the two countries appear to claim that COOL discriminates against Mexican and Canadian born cattle. However, COOL only regulates beef and does not place any domestic content requirements on that beef, so, the groups argue, it cannot be seen as discriminating against imported cattle.
       
       "Instead, it merely requires that information about the cattle be included in the beef label, and this requirement applies equally whether the beef is derived from domestic or imported cattle," the NFU and Cattlemen's Association write.
       
       The two groups argue that any competition issues alleged to be caused by COOL cannot in fact be directly attributed to the law and therefore cannot be seen as treating imports less favorably than domestic beef.
       
       Continuing their Article III:4 defense, the groups say segregation of production lines some companies have done to facilitate labeling is not required by the law and therefore cannot be challenged at the WTO.
       
       On the rules of origin allegations, the cattle groups argue that COOL does not fall within either the scope of Article IX of the GATT or Article 2 of the Rules of Origin Agreement, as Canada and Mexico claim. The groups argue that the 1956 GATT Working Party on Trade and Customs Regulations distinguished internal labeling requirements from labeling requirements for goods upon importation. The groups argue that COOL is an internal labeling requirement and, therefore, is subject to the national treatment obligations under GATT Article III and outside the scope of Article IX and the Rules of Origin Agreement, as determined by the Working Party.
       
       Canada and Mexico claim that COOL violates several provisions Article 2 of the TBT Agreement. NFU and the Cattlemen's Association argue that COOL meets the national treatment obligations under Article 2.1 of the TBT for the same reasons it meets the obligations under Article III:4 of the GATT.
       
       The two countries claim COOL violates TBT Article 2.2, which obligates the U.S. not to adopt or apply regulations "with the effect of creating unnecessary obstacles to international trade," and states that technical regulations "shall not be more trade-restrictive than necessary to fulfill a legitimate objective." The cattle groups argue that Congress' intent in creating COOL was to provide consumers with greater information, which would fit the definition of legitimate objective, and COOL does not restrict trade.
       
       They challenge that even if Mexico and Canada were able to show some trade restrictions, they would be unable to devise a less restrictive measure than required to meet the goals of COOL. The groups cite the Appellate Body's interpretation of Article 5.6 of the SPS agreement in its report on Australia Measures Affecting Importation of Salmon as creating this burden on the complainant. Article 5.6 states that members must ensure SPS protections are not "more trade-restrictive than required" to meet a legitimate objective.
       
       Canada and Mexico charge that COOL violates TBT Article 2.4, which requires the U.S. to use any relevant international standards as a basis for its technical regulations, specifically by not following the Codex Alimentarius General Standard for the Labeling of Prepackaged Food. The cattle groups say COOL complies with the TBT requirement, and argue the Codex standard that limits origin labeling to the country in which the good was substantially transformed does not go far enough to meet the COOL objective of providing consumers with more information on the origin of their food.
       
       If the U.S. followed the Codex standard, Canadian or Mexican cattle slaughtered in the U.S. should qualify for a U.S. origin label, while COOL limits a U.S. origin label to cattle that have been born, raised and slaughtered in the United States.
       
       The U.S. Cattlemen's Association and the NFU argue that COOL is not subject to the SPS Agreement because it is applied to consumer information and not to animal or plant health. Canada and Mexico in their panel requests seem to try to prevent the U.S. from defending COOL under the SPS Agreement by stating that if the U.S. attempts that defense, they will take the position that COOL violates Articles 2, 5 and 7 of the agreement.
       
       For its part, AMI charges that COOL also violates several provisions of the NAFTA in addition to backing the WTO claims by Canada and Mexico. COOL violates NAFTA origin labeling provisions by not treating meat from animals slaughtered in the U.S. as U.S.-origin meat and by not allowing meat undergoing substantial transformation in the U.S. to be exempted from COOL.
       
       Specifically, COOL violates NAFTA Annex 311.1, which provides "that the production of meat from an imported live animal results in the meat becoming a good of the United States." COOL only allows cuts of meat from animals born, raised and slaughtered in the U.S. to be labeled as a U.S.-origin product.
       
       In addition, NAFTA Annex 311.5(b) requires the U.S. to exempt from COOL meat that will undergo production within the U.S., according to AMI. That section includes an exemption from labeling requirements if the product "is to undergo production in the territory ... in a manner that would result in the good becoming a good of the importing Party under the Marking Rules."
       
       AMI also argues that COOL violates NAFTA Annex 311.4, which requires that all labeling requirements must "minimize the difficulties, costs, and inconveniences that the measure may cause to the commerce and industry of the other NAFTA Parties." Mexico and Canada have already charged that implementing COOL has been "immensely expensive," according to AMI.
       
       USTR sought comments by Jan. 8 from U.S. industry groups on the WTO panel.