UPDATE 1-US, Canada meat groups ask court to block labelling rules

Tue Jul 9, 2013 8:56pm EDT

* Meat groups say rules have hurt US processors, Canada farmers

* Rules are effort to give consumers more information on food origin

* USDA defends rules (Adds USDA comment)

By Rod Nickel

July 9 (Reuters) - Eight meat and livestock groups in the United States and Canada have asked a U.S. court to strike down stricter U.S. meat labelling rules they say have hurt U.S. processors and Canadian farmers, arguing they violate the U.S. Constitution.

The suit, filed late on Monday, seeks to undo recent revisions to four-year-old rules that require retail outlets to label meat according to where it comes from.

The country of origin labelling rules, known as COOL, have led to lower U.S. imports of Canadian cattle and pigs, which has hurt Canadian farmers and the U.S. processing plants that rely on imported livestock. The rules are an effort to give U.S. consumers more information about the origin of their food and some farm groups, particularly R-CALF USA, support them.

The World Trade Organization ordered the United States to comply with its rules on the issue by May 23, but the U.S. Department of Agriculture (USDA) made revisions to COOL that Canada and Mexico said would only make the situation worse.

One example is the rules no longer allow co-mingling of most muscle cuts from livestock in different countries within the same package, which creates added cost to U.S. feedlots and processors to segregate animals, said Mark Dopp, senior vice-president of regulatory affairs at the American Meat Institute (AMI).

"When weighed against significant costs, we think this rule doesn't make any sense," Dopp said on Tuesday.

The U.S. rule revisions, which took effect May 23, violate the U.S. Constitution by compelling speech in the form of the labels that does not directly advance a government interest, the meat industry groups said, adding that the rules also impose burdens on the industry with little or no benefit.

The U.S. Department of Agriculture declined to comment on the lawsuit, but defended the labelling rules.

"USDA remains confident that these changes will improve the overall operation of the program and also bring the mandatory COOL requirements into compliance with U.S. international trade obligations," spokeswoman Michelle Saghafi said.

Last month, Canada said it would ask the WTO to approve its proposed retaliatory measures against the U.S., including tariffs on U.S. products meat, cherries, rice and other products.

Mexico said it was considering suspending preferential trade tariffs with the United States over the dispute.

Along with AMI, the other industry groups behind the court action are the American Association of Meat Processors, Canadian Cattlemen's Association, Canadian Pork Council, National Cattlemen's Beef Association, National Pork Producers Council, North American Meat Association, and Southwest Meat Association.

The case is American Meat Institute et al v. United States Department of Agriculture et al, U.S. District Court, District of Columbia, No. 13-1033. (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Marguerita Choy)

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