Mexico Joins Canada At WTO In Opposing US Meat Labeling Law

MEXICO CITY --The Mexican government has joined Canada at the World Trade Organization in seeking consultations with the U.S. over a new labeling law Mexico thinks could hurt its livestock exports.

The Economy Ministry said Mexico made the request Wednesday, saying the U.S. law on country-of-origin labeling - or COOL - for agricultural and livestock products could be in violation of WTO rules.

The COOL rules, which went into effect Sept. 30 and apply to beef, pork, chicken, fish and seafood, fresh fruit and vegetables, peanuts and pecans, "affect Mexican exports of several products," the ministry in a statement.

The particular concern among the U.S.'s two North American Free Trade Agreement partners is in meat and livestock, since only meat from animals born, raised and slaughtered in the U.S. can be labeled as a product of the U.S.

For animals that are imported, but partly raised and slaughtered in the U.S., extensive paperwork is required for the labeling process.

"Therefore, it's expected that U.S. meat packers will begin to acquire only livestock from that country, since that facilitates their compliance with the labeling requirements," the Economy Ministry said.

Mexico "considers that the measure generates discrimination against Mexican products, since the U.S. consumer will prefer products labeled as originating in the U.S.," the ministry added. Canada sought WTO consultations on the labeling rules early this month amid concerns about the impact on livestock and meat exports to the U.S.

According to Mexican Agriculture Ministry data, Mexico exported 360,000 head of cattle to the U.S. in the first 10 months of this year. In all of 2007, live cattle exports were just over 873,000 head.

Michael McConnell, who specializes in beef trade at the U.S. Department of Agriculture's Economic Research Service, said the drop this year is "pretty dramatic."

Strong rainfall in Mexico and grassy conditions have meant cattle raisers can keep and fatten their herds longer. Smaller herd size has also limited the amount of cattle exported, he added.

The Economy Ministry said the WTO consultations are aimed at finding a mutually satisfactory solution, but that if that's not possible, Mexico could call for a WTO dispute settlement panel to consider the case.

-By Anthony Harrup, Dow Jones Newswires; (5255) 5001 5727, anthony.harrup@dowjones.com