July 23,2015

Press Contact:

Keith Chu (202) 224-4515

Wyden Voices Support for Hoeven-Stabenow Voluntary Country-of-Origin Labeling Bill

WASHINGTON - Senate Finance Committee Ranking Member Ron Wyden, D- Ore., today announced he will cosponsor the Voluntary Country-of-Origin Labeling (COOL) and Trade Enhancement Act, introduced by Senators John Hoeven, R-N.D, and Debbie Stabenow, D-Mich. 

 “This bill is a winner for Oregon farmers and for Oregon consumers,” Wyden said. “It ensures that consumers can continue to get the information they want about where their meat comes from, while also helping protect made-in-Oregon goods from Canadian and Mexican trade retaliation.” 

The current mandatory country-of-origin labeling program for meat was implemented following passage of the 2008 Farm Bill.  Canada and Mexico successfully challenged that program at the World Trade Organization and are now seeking permission from the WTO to increase tariffs on U.S. exports.  The VCOOL Act replaces the mandatory labeling requirements that were the subject of Canada and Mexico’s trade challenge and establishes a new voluntary labeling program for meat sold in the United States.  In so doing, the VCOOL Act fully addresses the WTO-inconsistency, while preserving key aspects of U.S. country of origin labeling, including the “Product of the U.S.” label on which many consumers rely for accurate information about where their meat comes from. 

How would the legislation affect the ongoing WTO arbitration process? 

Given that the provisions of law that were the basis for the WTO inconsistency would no longer exist, Canada and Mexico could opt to suspend or terminate the arbitration.  Were Canada and Mexico to nonetheless proceed with the arbitration, the arbitrator would be permitted to consider the new legislation in determining the amount of the award, and this could eliminate the amount of retaliation they are permitted to take.  In at least one previous case, WTO arbitrators have taken into account changes to a measure in their findings and recommendations.  Additionally, in some cases, arbitrators have developed formulas for damages awards that ensure that the amount of retaliation authorized accounts for changes in how a measure is applied in the future.

Even if retaliation is authorized without regard to the new measure, WTO rules clearly state that retaliation is “temporary” and a "last resort”.  WTO rules require that Members only apply retaliation until the WTO-inconsistency has been removed. Canada and Mexico are prohibited under WTO rules from exercising retaliation based on mere political objections to the new legislation.  Retaliation is permissible only if Canada and Mexico disagree with the United States as to whether the new law constitutes compliance.  In the event of a disagreement, the United States could ask for a WTO proceeding to terminate their retaliation rights.