UNITED STATES - CERTAIN COUNTRY OF ORIGIN LABELLING (COOL) REQUIREMENTS RECOURSE TO ARTICLE 21.5 OF THE DSU BY MEXICO
Document: Request for the Establishment of a Panel
Date: 20 August 2013
Document codes: WT/DS386/25
Complainant: Mexico
Respondent: U.S.
Third parties: Argentina, Australia, Brazil, Canada, China, Colombia, EU, Guatemala, India, Japan, South Korea, New Zealand, Peru, Taiwan
Dispute stage: Implementation & Compliance
Agreements cited: Art. III, X:3(a), IX  GATT 1994Art. 2, 12  Technical Barriers to Trade (TBT)Art. 2, 5, 7  Sanitary and Phytosanitary Measures (SPS)Art. 2  Rules of Origin

UNITED STATES - CERTAIN COUNTRY OF ORIGIN LABELLING
(COOL) REQUIREMENTS
RECOURSE TO ARTICLE 21.5 OF THE DSU BY MEXICO
Request for the Establishment of a Panel
 The following communication, dated 19 August 2013, from the delegation of Mexico 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 Panel Report, as modified by the Appellate Body Report, in United States — Certain
Country of Origin Labelling Requirements (WT/DS386) (US - COOL (Mexico)).
1 The DSB ruled that
the "COOL Measure" (comprising the "COOL statute" 2 passed by the US Congress, and its
implementing regulation, the "2009 Final Rule (AMS)" 3 i s s u e d b y t h e U S D e p a r t m e n t o f
Agriculture), particularly in regard to the muscle cut meat labels, was inconsistent with Article 2.1
of the TBT Agreement because it accords less favour able treatment to imported livestock than to
like domestic livestock4 and recommended that the United States bring its measure into conformity
with the Agreement.5

On 21 August 2012, the United States informed the DSB that it intended to comply with its
WTO obligations in this dispute, but that it would require a reasonable period of time to do so. 6
Mexico and Canada, on the one hand, and the United States on the other, were unable to agree on
a reasonable period of time for implementation.

On 13 September 2012, Mexico requested that the reasonable period of time be determined
through binding arbitration pursuant to Article 21.3(c) of the DSU. 7 On 4 December 2012, the
Arbitrator determined that the reasonable period of time ("RPT") for the United States to
implement the recommendations and rulings of the DSB in the COOL disputes was 10 months from

1 Minutes of DSB Meeting, WT/DSB/M/320, para. 110 (23 July 2012). See Appellate Body Report, US –
COOL (Mexico), WT/DS386/AB/R (29 June 2012); Panel Report, US – COOL (Mexico), WT/DS386/R
(18 November 2011).
2 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 (Mexico), para. 1(a) and footnotes 4 and 5 thereto).
3 Final Rule on 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, published in 74 Fed. Reg. 2658 (15 Jan. 2009). In its reports, the Appellate Body referred to
the regulations as the "2009 Final Rule (AMS)". (See Appellate Body Report, US – COOL, para. 1(b) and
footnote 6 thereto).
4 Panel Report, US – COOL (Mexico), paras. 7.548 and 8.3(b); Appellate Body Reports, US – COOL,
para. 496(a)(iv).
5 Appellate Body Report, US – COOL (Mexico), para. 497.
6 Communication from the United States, WT/DS384/19 and WT/DS386/18 (21 August 2012). See
Minutes of DSB Meeting, WT/DSB/M/321, para. 58, (31 August 2012).
7 Request by Mexico for Arbitration under Article 21.3(c) of the DSU, WT/DS386/19, 17 September
2012.

the date of adoption of the Panel and Appellate Body Reports on 23 July 2012. 8 In reaching this
conclusion, the Arbitrator considered that this period of time should allow the United States to
implement the recommendations and rulings of the DSB regardless of whether it decides to do so
by regulatory action alone or by legislative action followed by regulatory action.
9 The RPT ended on
23 May 2013.

On the same date, the United States published the Final Rule on 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 (the "2013
Final Rule").
10 The 2013 Final Rule made only minor ch anges to the Proposed Rule. Like the
Proposed Rule, it was limited to changes to the 2009 Final Rule and did not modify the COOL
statute. In addition, the 2013 Final Rule indicate d that the COOL measure as revised by the 2013
Final Rule (which is part of the "Amended COOL Measure") will not be fully enforced for an
additional six months past the 23 May 2013 deadline.

The Amended COOL Measure does not eliminate the trade restrictive effects of the measure
nor does it eliminate the effects of the measure that modify the conditions of competition in the US
market to the detriment of imported livestock by creating an incentive in favour of processing
exclusively domestic livestock and a disincentive against handling imported livestock. The
Amended COOL Measure requires that labels for muscle cut covered commodities from animals
that are slaughtered in the United States identi fy the country(ies) in which each of the three
designated production steps occurs—i.e., born, raised and slaughtered. It also eliminates the prior
allowance to use the mixed origin label ("Product of United States, Country X") on muscle cuts
produced from animals commingled on a single production day. These changes increase the need
for segregation and impose an even higher burden and associated costs for entities that process
livestock of different origins, including Mexican cattle. In this way, the Amended COOL Measure is
even more trade-restrictive and discriminatory than the COOL Measure.

There is a disagreement between Mexico and the United States as to "the existence or
consistency with a covered agreement of measur es taken to comply with the recommendations
and rulings" of the DSB in the COOL disputes. Mexico considers that changes made by the 2013
Final Rule to the 2009 Final Rule (AMS) do not bring the COOL Measure into compliance with the
DSB's recommendations and rulings. Moreover, the Amended COOL Measure is not consistent with
the United States' obligations under the covered Agreements.

The following measures comprise the Amended COOL Measure:

i) 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) and the Food, Conservation, and Energy Act of 2008
(Section 11002 of Public Law 110-246);

ii) Final Rule 2009 (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 (Jan. 15, 2009);

iii) 2013 Final Rule – Mandatory Country of Orig in Labeling of Beef, Pork, Lamb, Chicken,
Goat Meat, Wild and Farm-raised Fish and Shellfish, Perishable Agricultural
Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts, 78 Federal
Register 31367 (May 24, 2013);

8 Award of the Arbitrator, US – COOL, Arbitration under Article 21.3(c) of the DSU, WT/DS386/23,
(4 December 2012), para. 123.
9 Ibid.
10 78 Fed. Reg. 31367-31385 (May 24, 2013). USDA published the Proposed Rule to amend the COOL
regulations on 12 March 2013 (78 Fed. Reg. 15645-15653 (March 12, 2013). On 11 April 2013, in response to
USDA' invitation to the public to provide comments, Mexico submitted a letter stating its view that the
Proposed Rule would not bring the United States into compliance with its WTO obligations. Letter from
Secretaría de Economía and Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación to
US Department of Agriculture (April 11, 2013), available at
http://www.regulations.gov/#!documentDetail;D=AMS-LS-13-0004-0798.

iv) Any modifications or amendments to instruments (i) through (iii) above, including any
further implementing guidance, directives, policy announcements or any other
document issued in relation to those instruments.

Mexico considers that the United States has failed to implement the recommendations and
rulings of the DSB in this dispute. The Amended COOL Measure is also inconsistent with the
covered Agreements. The claims in respect of which Mexico is seeking the establishment of a panel
include:

i) The Amended COOL Measure is inconsiste nt with Article 2.1 of the TBT Agreement
because continues to accord imported livestock treatment less favourable than that
accorded to like domestic livestock;

ii) The Amended COOL Measure is inconsiste nt with Article 2.2 of the TBT Agreement
because it creates an unnecessary obstacle to international trade and is more trade
restrictive than necessary to fulfill a legitimate objective, taking account of the risks
non-fulfillment would create.

iii) The Amended COOL Measure is inconsistent with Article III:4 of the GATT 1994
because it modifies the conditions of competition in the relevant market to the
detriment of imported products as compared to like domestic products and, therefore,
violates the national treatment obligation.

iv) The Amended COOL Measure nullifies or impa irs benefits that accrue to Mexico under
the GATT 1994 within the meaning of GATT Article XXIII:1(b).

On 10 June 2013, Mexico and the United States concluded a Sequencing Agreement with a
view to facilitating the procedures for a resolution of this dispute under Articles 21 and 22 of the
DSU. Since "there is disagreement as to the existence or consistency with a covered agreement of
measures taken to comply with the recommendations and rulings" of the DSB between Mexico and
the United States, Mexico requests that a panel be established under Articles 6 and 21.5 of the
DSU, Article 14 of the TBT Agreement, and Articl e XXIII of the GATT 1994 with standard terms of
reference, as set forth in Article 7.1 of the DSU, and that the DSB refer the matter to the original
panel, if possible, pursuant to Article 21.5 of the DSU.

Pursuant to paragraph 2 of the Sequencing Agr eement, Mexico notes that it is not required
to hold consultations with the United States prior to requesting the establishment of an
Article 21.5 panel.

Mexico asks that this request be placed on the agenda of the DSB meeting scheduled for
30 August 2013.