How CETA Can Endanger Country of Origin Labelling (COOL)

Executive Summary

Even though CETA is preemptively entering into force, EU member state parliaments have the responsibility of cancelling or ratifying the EU’s trade deal with Canada. In order to do so, they must confront a series of critical questions regarding CETA, including on the future of European food and agriculture. One such question relates to the labelling of meats sold in European supermarkets.

The so-called ‘free’ trade rules rooted in the World Trade Organisation (WTO) and expanded in CETA pose a serious threat to the goal of creating a consumer and farmer-friendly EU labelling scheme for meat and dairy products sold in Europe. Such country of origin labelling laws (COOL) allow consumers to know where certain foods originated. In a world with highly globalised supply chains, an animal could have been born in one country, fattened in another, and slaughtered in yet another before it ends up on the dinner plate as beef or pork.

There is broad and strong support among consumers, independent family farmers and the European Parliament for labelling of meat products. COOL addresses consumers’ demands to know where their food comes from, and can help to assure consumers that incidents like the 2013 EU horsemeat scandal are not repeated.

The EU currently has COOL regulations for fresh cuts of beef, pork, poultry, sheep and goat meat, but not for processed meat. The European Parliament and some EU member states have proposed expanding the scope of labelling to include processed foods, but have been met with resistance from the meat industry and the European Commission. The fact that the EU COOL laws currently exclude dairy and processed meat, and is limited to meat from cattle, pigs, poultry, goats and sheep shows that there is still much need for improvement in the EU’s country of origin labelling scheme.

In fact, due to popular demand, France began a two-year trial in January 2017 to expand COOL to processed foods containing more than 8 percent meat or more than 50 percent milk. Any such products must now specify where the livestock was born, raised and slaughtered. European agribusiness has opposed this move, saying it fragments the EU common market. Yet Italy, Portugal, Lithuania, Romania, Greece, Finland and Spain are also moving forward with more stringent COOL provisions for products such as meat and dairy and extending COOL to nonanimal products such as wheat in pasta. If these initiatives are successful, they could lead to an EU-wide adoption of COOL for meat and milk in processed foods.

Regrettably, CETA is likely to stand in the way of these popular and needed improvements to meat labelling in Europe. This is because even basic country of origin labelling of fresh meat, let alone expanding labelling to processed foods, is under pressure from transnational meat processing giants such as JBS and Cargill. These global companies dominate the meat industry in Canada, the U.S., Brazil and Mexico, and have spent years lobbying the Canadian and U.S. governments to get COOL repealed in the U.S.1

On behalf of these giants, Canada used the dispute settlement system of the WTO to help repeal a U.S. law very similar to current EU rules, which required companies to indicate each country where an animal had been born, raised and slaughtered.2 In 2015, the WTO ruled in favour of Canada against the US, contending that the U.S. labelling scheme was unfair to Canadian pork and beef producers. Using the WTO judgement as an excuse, the U.S. Congress voted to repeal the law in its entirety, including for poultry, even though the WTO ruling was limited to beef and pork. The WTO ruling helped achieve what the industry had been unable to accomplish after five years of lobbying—a repeal of U.S. country of origin labelling of meats.

The global meat industry views COOL as a barrier to expanding meat sales.3 With CETA granting Canada greater access to the EU market, it will increase agribusiness incentives to undermine existing EU COOL legislation, and will certainly stand in the way of expanding labelling to processed meats and dairy products. CETA will expand the EU’s quotas for Canadian pork and beef imports by 12-14 times the current levels.4 The successful WTO challenge of US COOL law suggests that Canada may now be more than willing, on behalf of its agribusiness interests, to bring a case against the EU’s even more comprehensive labelling scheme at the WTO. The European Parliament’s recommendation to expand COOL to processed meats, as well as efforts by France, Italy and others to expand COOL to processed foods that include meat and dairy or to pasta, are thus vulnerable to such challenges.

Moreover, CETA will add another forum for challenging COOL rules, the Investor Court System. The President of Cereals Canada, Cam Dahl, had hinted at legal action even before Italy approved COOL for pasta, stating that: “from an ideal perspective, I hope Italy doesn’t take this final step and officially move forward… But we can’t assume that that is going to happen, so we do have to prepare, whether that’s WTO action, or whether there are measures under the Canada-EU trade agreement. We have to prepare for that.”5 This means that after CETA comes into force, initiatives such as France or Italy’s could be permanently derailed, let alone be expanded to an EU-wide level.

The Investor Court System empowers foreign investors—including meat-processing corporations—to directly sue the EU and member states (and seek compensation) for regulations that they claim reduce profits or discriminate against non-EU corporations that have invested in the EU. CETA empowers the Canadian meat industry to initiate such challenges. CETA’s chapter on regulatory cooperation promotes the harmonisation of regulations between Canada and the EU. With Canada lacking adequate COOL for meats, the EU’s COOL regulations are particularly vulnerable to being harmonised to weak Canadian standards.

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