In a finding announced Friday, a World Trade Organization (WTO) Appellate Body has upheld the finding of a WTO dispute panel that the U.S. Mandatory Country of Origin Labeling (COOL) law is inconsistent with WTO obligations.

In November 2011 the WTO dispute panel had determined that U.S. COOL requirements were inconsistent with the United States' trade obligations. In March, the United States appealed the ruling of the panel.

The finding upholds claims made by Canada and Mexico that they are placed at a competitive disadvantage because of COOL’s requirements.  “The Appellate Body upheld…the panel's finding that the COOL measure violates Article 2.1 by according less favorable treatment to imported Canadian cattle and hogs than to like domestic cattle and hogs,” according to the WTO announcement.

The National Pork Producers Council (NPPC) has opposed the COOL law since its conception. “We believed when it was being debated in Congress that COOL would be an unnecessary burden to trade,” said NPPC President R.C. Hunt, a pork producer from Wilson, N.C. “We have maintained that belief consistently from the outset, and we will be working to achieve U.S. compliance with today’s WTO decision.”

Hunt pointed out that the United States risks retaliation from Canada and Mexico, both of which filed complaints with the WTO over the U.S. labeling law, if it refuses to comply with the COOL ruling.

Canada alleged that the mandatory provisions under COOL were inconsistent with the United States' WTO obligations.

The U.S. beef industry, like NPPC, fears retaliation by Canada and Mexico if the COOL law is not revised or retracted which would require an act of Congress. “The WTO ruling will put our trade relationship with Canada and Mexico in serious jeopardy,” said Colin Woodall, National Cattlemen’s Beef Association vice president of government affairs. “They are our number one and number two export markets for U.S. beef and if they retaliate against us it will have a huge impact on every cattleman’s bottom line.”