DS384 United States - Certain Country of Origin Labelling (COOL) Requirements (1 déc. 2008 – 7 déc. 2015)

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Question 2a& 3a.

There are three major components of the WTO: 1) a set of principle and rules which make violations clear and solve coordination problems; 2) an intergovernmental bargaining process which reduces transaction costs and makes cooperation between members more beneficial; 3) a dispute settlement mechanism that identifies and punishes defectors to ensure the rules are followed. These three components are designed to reduce the possibility of cooperation problems.

One of the most fundamental WTO rules is its “nondiscrimination” principle. Members need to treat all countries in the same manner as treating its favorite trading partners. Also, imported and locally produced goods should be treated equally. However, individual states face incentives to defect from these fundamental principles to protect their local markets and only trade with their favorable trading partners. In the case of DS384 (COOL), one of the most fundamental WTO rules, “nondiscrimination” principle, is used to address the unfavorable treatment that Canadian livestock goods received in the U.S. market (U.S. domestic trade protectionism).

(DS384) In 2008, Canada requested consultations with the US COOL provisions as they make Canada receive a less favorable treatment in the U.S. market. The panel's findings confirmed the less favorable treatment Canadian livestock goods received in the U.S market. The Appellate Body upheld some of the Panel's findings and asked the U.S. to modify the COOL provisions, or it would face punishments. WTO's Dispute Settlement Mechanism is designed to prevent potential noncompliance.

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