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Nov. 5 — The statute requiring mandatory country of origin labeling (COOL) for muscle cuts of meat needs to be repealed for the U.S. to comply with an adverse World Trade Organization decision, a COOL opponent argued at a Heritage Foundation event.
“The solution isn't via regulation. The statute has to be repealed,” said Edward J. Farrell, a principal at Washington-based OFW Law and counsel for the Canadian Cattlemen's Association.
U.S. Chamber of Commerce Senior Vice President for International Policy John G. Murphy said that the COOL Reform Coalition will look for an appropriate legislative vehicle in the weeks ahead and—failing that—early in the next Congress. The industry coalition has asked Congress to take action directing the agriculture secretary to rescind elements of COOL found to be in violation of U.S. trade obligations.
Supporters of COOL on Oct. 23 called on the U.S. to appeal the adverse WTO ruling, saying that any problems with current COOL rules can be dealt with administratively. National Farmers Union President Roger Johnson has urged Congress to resist any attempts to make changes to the law during the upcoming lame-duck session given the lengthy timeline of the WTO process and the variable outcomes possible.
The WTO Appellate Body ruled that COOL rules promulgated in 2009 discriminated against meat from Canada and Mexico. The U.S. Agriculture Department issued new regulations in 2013 to comply with U.S. trade obligations, but a WTO compliance panel decision released Oct. 20 stated that the amended “COOL measure entails increased detrimental impact on imported livestock.”
The revised 2013 COOL regulations require meat producers to specify on retail packaging where each animal was born, raised and slaughtered. The rules also bar the mixing of muscle cuts from different countries under a general label.
According to Farrell, the statute forces segregation of animals as well as meat cuts to achieve accurate labeling. The easiest way to avoid the cost of segregation is simply not to buy Canadian or Mexican cattle, he said. “For the U.S. to come into compliance, it needs to make a legislative change and the legislative change has got to be sufficient to eliminate the need to segregate,” Farrell said.
“Production step labeling is not doable,” American Meat Institute Senior Vice President of Regulatory Affairs and General Counsel Mark Dopp said. “I can tell you with some degree of certainty that while COOL has not, in and of itself resulted in certain plants and feedlots going out of business, it has been a contributing factor.”
Murphy warned that WTO-authorized retaliation by Canada and Mexico could result in billions of dollars in losses in the U.S. industry across multiple sectors, including food production, agriculture and many manufacturing sectors.
Supporters of COOL have argued that talk of retaliation is premature and amounts to scare tactics, as the U.S. may win on the issue on appeal. However, Murphy characterized this outcome as “highly unlikely,” noting that the WTO compliance panel found that the U.S. had violated two WTO agreements.
“Supporters of COOL are saying there is no rush. But they're wrong. There is little time to avoid retaliation,” Murphy said. Assuming that the U.S. appeals, final WTO adjudication could come as early as next spring, and retaliatory tariffs could kick in 60 days thereafter, he added. Congressional action within 60 days of the final WTO adjudication is highly unlikely, Murphy said. For this reason, Congress must act now to allow immediate action to comply with a final adverse ruling. In the unlikely event of a WTO decision overturning the decision faulting COOL, the proposal can be framed in a way that it will not have any effect, he said.
Mandatory COOL was first required in the 2002 farm bill. The U.S. Congress passed an expansion of COOL requirements in the 2008 farm bill.
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