UNITED STATES – CERTAIN COUNTRY OF ORIGIN LABELLING (COOL) REQUIREMENTS RECOURSE TO ARTICLE 21.5 OF THE DSU BY CANADA
Document: Request for the Establishment of a Panel
Date: 20 August 2013
Document codes: WT/DS384/26
Complainant: Canada
Respondent: U.S.
Third parties: Argentina, Australia, Brazil, China, Colombia, EU, Guatemala, India, Japan, South Korea, Mexico, New Zealand, Peru, Taiwan
Dispute stage: Implementation & Compliance
Agreements cited: Art. 2.1, 2.2, 2.4  Technical Barriers to Trade (TBT)Art. 2, 5, 7  Sanitary and Phytosanitary Measures (SPS)Art. IX:2, IX, X:3(a)  GATT 1994Art. 2(b), 2(c), 2(e), 2(j)  Rules of Origin

UNITED STATES – CERTAIN COUNTRY OF ORIGIN LABELLING
(COOL) REQUIREMENTS
RECOURSE TO ARTICLE 21.5 OF THE DSU BY CANADA
Request for the Establishment of a Panel
 The following communication, dated 19 August 2013, from the delegation of Canada to the
Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 21.5 of the DSU.

On 23 July 2012, the Dispute Settlement Body ("DSB") adopted the Appellate Body Report
and the Report of the Panel, as modified by the Appellate Body Report, in United States – Certain
Country of Origin Labelling (COOL) Requirements (WT/DS384) ( US – COOL (Canada) )
1. Both the
Panel and the Appellate Body found that the COOL measure of the United States 2 violated
Article 2.1 of the Agreement on Technical Barriers to Trade ("TBT Agreement") because it accorded
imported livestock treatment less favourable than that accorded to like domestic livestock. The
DSB recommended that the United States bring its COOL measure into conformity with its
obligations under the TBT Agreement and the General Agreement on Tariffs and Trade 1994
("GATT 1994").

At the DSB meeting of 31 August 2012 the United States indicated its intention to comply
with the recommendations and rulings of the DSB
3. This statement confirmed the contents of a
letter from the United States to the same effect, dated 21 August 20124.

An arbitration conducted under Article 21.3(c) of the Understanding on Rules and Procedures
Governing the Settlement of Disputes ("DSU") determined that the reasonable period of time for
the United States to implement the DSB's recommendations and rulings was ten months from
23 July 2012, the date of the DSB's adoption of the Panel and Appellate Body Reports 5. Therefore,
the United States was under an obligation to bring itself into compliance with the
recommendations and rulings of the DSB by 23 May 2013.

1 Dispute Settlement Body, Minutes of Meeting of 23 July 2012, WT/DSB/M/320 (of
28 September 2012). See Appellate Body Report, US – COOL (Canada), WT/DS384/AB/R, 29 June 2012; Panel
Report, US – COOL (Canada), WT/DS384/R, 18 November 2011.
2 The "COOL measure" on which the Panel and the Appellate Body made findings comprised: (1) the
COOL statute (i.e. the Agricultural Marketing Act of 1946, as amended by the "2002 Farm Bill" and the "2008
Farm Bill" (60 Stat. 1087, United States Code, Title 7, Section 1621 et seq., as amended)) (see Appellate Body
Report, US – COOL (Canada), at para. 1(a) and footnotes 4 and 5 thereto; Panel Report, US – COOL (Canada),
at paras. 7.77-7.82); and (2) the COOL regulations (i.e. 2009 Final Rule (AMS) – Mandatory Country of Origin
Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable
Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts (7 CFR Parts 60 and 65), 74 Fed.
Reg. 2658-2707, 15 January 2009)) (see Appellate Body Report, US – COOL (Canada), at para. 1(b) and
footnote 6 thereto; Panel Report, US – COOL (Canada), at para. 7.85). The Panel, in para. 7.61 of its Report,
"consider[ed] it appropriate to examine the relevant elements of both the COOL statute and the 2009 Final
Rule (AMS) pertaining to the COOL requirements for meat products 'as an integral part' of one single COOL
measure."
3 Dispute Settlement Body, Minutes of Meeting of 31 August 2012, WT/DSB/M/321 (of
7 November 2012).
4 The letter was circulated as document WT/DS384/19.
5 WT/DS384/24, of 4 December 2012.

On 23 May 2013, the Agricultural Marketing Serv ice of the US Department of Agriculture
introduced amendments (through the issuance of a Final Rule) to the COOL regulations of the
United States, with legal effect as of the same date ("2013 Final Rule")
6. These amendments
brought about significant changes to the COOL measure in respect of the labelling of muscle cuts
of meat, in that these amendments (1) abolished the possibility of commingling, during a
production day, muscle cuts derived from livestock born and/or raised in different countries, and of
marketing these muscle cuts under a common label; and (2) require references on the label of
muscle cut covered commodities to the country where the animal concerned was born, to the
country or countries in which the animal was raised, and to the country in which the animal was
slaughtered.

The "amended COOL measure" consists of:

1) the COOL Statute – The Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et seq.), as
amended by the Farm Security and Rural Investment Act of 2002 (Section 10816 of
Public Law 107-171) (2002 Farm Bill) and the Food, Conservation, and Energy Act of
2008 (Section 11002 of Public Law 110-246) (2008 Farm Bill);

2) the 2009 Final Rule (AMS) – Mandatory Co untry of Origin Labeling of Beef, Pork,
Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable
Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts (7 CFR
Parts 60 and 65), 74 Fed. Reg. 2658-2707, 15 January 2009;

3) the 2013 Final Rule – Mandatory Country of Origin Labelling of Beef, Pork, Lamb,
Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural
Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts (7 CFR Parts 60 and
65), 78 Fed. Reg. 31367-31385, 24 May 2013; and,

4) any modifications or amendments to instruments listed in (1) through (3) above,
including any further implementing guidance, directives, policy announcements or any
other document issued in relation to those instruments.

The expanded labelling requirements of the am ended COOL measure will result in increased
segregation and cost for firms using animals born or raised outside of the United States, or the
meat produced from them. Therefore, the amended COOL measure will have an effect that is
diametrically opposed to what is necessary to brin g the United States into compliance: instead of
removing the discrimination against Canadian livestock, the amended COOL measure will increase
the discrimination that was previously found by the Panel and the Appellate Body
7.

The amended COOL measure has failed to bring the United States into compliance with its
obligations under the WTO Agreement. In particular, Canada considers that the amended COOL
measure is inconsistent with the following provisions:

1) Article 2.1 of the TBT Agreement becaus e it continues to accord cattle and hogs
imported from Canada treatment less favourable than that accorded to like US cattle
and hogs;

2) Article III:4 of the GATT 1994 because it mo difies the conditions of competition in the
US market to the detriment of cattle and hogs imported from Canada as compared to
like US cattle and hogs; and

6 Amendments to 7 CFR Parts 60 and 65 (Mandatory Country of Origin Labelling of Beef, Pork, Lamb,
Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts,
Pecans, Ginseng, and Macadamia Nuts), issued on 23 May 2013 and published in 78 Fed. Reg. 31367-31385,
24 May 2013.
7 In response to an invitation for written comments on the proposed amendments to the COOL
regulations (released as a "Proposed Rule" on 8 March 2013 and published in 78 Fed. Reg. 15645-15653,
12 March 2013), the Government of Canada, in a written communication, dated 10 April 2013, expressed its
view that the (then proposed) amendments would not bring the United States into compliance with its WTO
obligations.

3) Article 2.2 of the TBT Agreement becaus e it creates an unnecessary obstacle to
international trade, as it is more trade-restrictive than necessary to fulfil a legitimate
objective, taking account of the risks non-fulfilment would create.

In addition, the amended COOL measure nullifies or impairs benefits Canada was entitled to
expect in respect of exports of its cattle and hogs under Article XXIII:1(b) of the GATT 1994.

On 10 June 2013, Canada and the United States reached an understanding in this dispute on
"Agreed Procedures under Articles 21 and 22 of the Dispute Settlement Understanding"
("Sequencing Agreement"). According to paragraph 2 of the Sequencing Agreement, Canada is not
required to hold consultations with the United St ates before requesting the establishment of an
Article 21.5 panel. The Sequencing Agreement was previously notified to the DSB
8.

Considering that there is disagreement between Canada and the United States as to the
existence or consistency with the covered agreements of a measure taken to comply with the
recommendations and rulings of the DSB, Canada requests that a panel be established under
Articles 6 and 21.5 of the DSU, Article 14 of the TBT Agreement, and Article XXIII of the
GATT 1994, with standard terms of reference as se t out in Article 7.1 of the DSU. In accordance
with Article 21.5 of the DSU, the DSB should refer this matter to the original Panel, if possible.

Canada asks that this request be placed on the agenda of the next meeting of the DSB,
scheduled to be held on 30 August 2013.