America’s County of Origin Labeling (COOL) requirements for retail sales of meat and certain perishable commodities are in danger of being declared unfair trade practices.

The World Trade Organization (WTO) agreed this week to set up a dispute settlement panel to resolve Canada’s challenge of the mandatory COOL requirements imposed under the 2008 Farm Bill by the U.S. Congress.

The U.S. blocked Canada’s October request for a dispute settlement panel, but the use of the block can only be used once.  When Canada again made the request, it was granted Thursday by WTO’s Dispute Settlement Body.

The government of Canada maintains the COOL requirements have resulted in greater costs for processors who must segregate Canadian animals and meat in order to comply with the new law.  As a result some processors no longer buy Canadian animals or only buy them on certain days at a discounted price.

Canada argues COOL is making both its beef and pork less competitive because of the additional requirements and costs.

On the other side, the United States says county of origin labeling pre-dates WTO and has long been a legitimate policy.

The Food, Conservation and Energy Act of 2008, also known as the Farm Bill, includes the COOL requirements as a mandate at the retail level for beef, lamb, pork, chicken, goat, perishable agricultural commodities and certain nuts.

The statute has four categories for origin of meat: 1.) Exclusive U.S. origin; 2. ) Multiple countries of origin; 3.) Animals for immediate slaughter; and 4.) Exclusively foreign origin.

The U.S. Department of Agriculture published a final interim rule to implement COOL on Aug. 1, 2008.  Canada first asked for WTO dispute settlement on Dec. 17, 2008.  USDA’s final rule became effective on March 16, 2009.

Canada and Mexico have sought changes ever since. “We continue to stand up for the rights of Canadian producers during the dispute settlement process and make the case that the U.S. should lift these onerous requirements, ” says Canada’s International Trade Minister Stockwell Day.

WTO dispute panels typically take about nine months to go through their process and issue a report.

US imports of Canadian livestock are 34 percent lower for the first six months of 2009 compared to the same period of 2008, USDA reports.