WASHINGTON, D.C. — The World Trade Organization (WTO) has ruled the United States is in violation of global trade rules, a decision with which some domestic commodity groups agree.

The WTO announced on Nov. 18 that Country-of-Origin Labeling (COOL) rules included in the 2002 farm bill ran counter to world trade policies. Complaints against COOL were brought in 2008 by Canada and Mexico, each of which said the labeling rules placed their products at an unfair advantage in the U.S. retail market.

At the same time, the National Cattlemen’s Beef Assoc. (NCBA) said the regulation “unjustly harms agricultural commerce.”

“This is a strong ruling from the World Trade Organization that proves COOL was not only a disservice to U.S. cattlemen and –women, but also contained far-reaching implications for two of the most important trade partners for U.S. agriculture,” said Colin Woodall, vice president of government affairs for the NCBA.

In his statement, Woodall urged the U.S. not to appeal the ruling and asked U.S. Trade Representative Ron Kirk to work with NCBA and other commodity organizations to pressure Congress to bring the nation into compliance with WTO regulations.

“This ruling solidifies our concerns that COOL would have extensive trade implications, as NCBA expressed during 2008 farm bill deliberations,” said Woodall. “U.S. livestock producers have yet to see any financial benefit from COOL provisions.

“In many cases, ranchers who feed imported cattle have incurred significant discounts, which have not been offset by benefits proponents of COOL claimed would be available. Just as importantly, cattlemen have yet to discern any positive reaction from consumers regarding mandatory origin labeling.”

Mike Deering, a spokesman for the NCBA, said it’s important for the U.S. to drop COOL provisions now that the WTO has announced its decision. “If we don’t go into compliance, we risk retaliatory tariffs for our products, and that could potentially stop U.S. beef from being exported,” said Deering.

The country has 60 days to appeal, and Deering said NCBA hopes there is no appeal.

The idea of COOL dates back to the late 1970s and was pushed by vegetable growers in California and Florida as a way to promote their products over cheaper produce grown in Mexico. The fear was Mexico would flood the domestic market with produce that was priced at below that grown domestically.

The California law was overturned by the courts, but the Florida law was upheld and became the basis on which the federal regulation was modeled.

According to a background study sponsored by the Food Marketing Institute, which represents the nation’s supermarkets, the 2002 farm bill introduced COOL regulations be put in place for seafood, beef, veal, pork, lamb, fresh and frozen fruit and vegetables and peanuts. The law requires producers to track and document the origin of their foods, including those produced in this country and products imported from more than 50 countries. Because of the economic impact of that tracking, many retailers and producers have asked Congress to come up with a less invasive and cheaper alternative.

One proposal was for the USDA to come up with a “Made in the USA” label for domestic products. While the issue has been discussed in Congress in recent years, it has not moved in that direction because of the concern over possible terrorist attacks on the nation’s food supply. Still, the Food Marketing Institute (FMI) and the General Accounting Office report imported food does not have significantly higher levels of pesticide residue than domestically produced food.

In addition, all imported food is inspected by either the USDA (meat, poultry and eggs) or by the U.S. Food and Drug Administration.

From 1980-2002, consumers spent $850 billion on food and only 9 percent of that was on imported products, according to the FMI. It said the cost to fully comply with COOL is $500 million a year, much of which is passed on to consumers.

The FMI report states: “The proposed regulations require that all fresh meat products have labels defining the country of breeding, birth, slaughter and processing for every animal in the products – all tracked and labeled in alphabetical order.” For meat labeling, the difficulty is that beef born in the U.S. could be raised in Canada, and then slaughtered in the U.S. That, says the FMI, creates confusion in consumers about the product.

Instead of labeling all products, the FMI, along with domestic producers, suggest U.S.-raised products be labeled as “Grown in the USA.” Along with the NCBA, some 350 industry associations and companies support voluntary labeling.

Woodall said the fear among cattle producers is that implementing COOL would have trade implications that would harm U.S. ranchers.

“We look forward to working closely with Ambassador Kirk and members of Congress to ensure cattlemen are not put in a position to lose access to two very valuable global markets. An appeal is not the answer. Bringing the United States into compliance is the answer,” he added.