Just 24-hours after the WTO ruled for the fourth time that the U.S. mandatory country-of-origin-labeling (COOL) law was in violation of international trade obligations, the chairman of the House Committee on Agriculture introduced legislation to repeal COOL.
“In light of the WTO’s decision and the certainty that we face significant retaliation by Canada and Mexico, we cannot afford to delay action. That’s why I was joined by 61 of my colleagues in introducing H.R. 2393, a bill to repeal mandatory COOL for beef, pork and chicken,” said Chairman Mike Conaway (R-Texas) during a press conference outside the U.S. Capitol building in Washington, D.C. The committee will hold a business meeting on Wednesday, May 20, to consider the legislation.
The latest WTO ruling paves the way for Canada and Mexico to seek authorization to impose economic sanctions on U.S. products destined for their countries. The Canadian government has previously published a list of targeted products that not only includes live cattle and beef but also products like wine, certain metals, pastas and more. In all, sanctions could reach $2 billion.
The Canada Ministry for Food and Agriculture estimates its livestock industry has suffered more than $1 billion annually in damages caused by COOL. Shortly after the WTO decision was announced, the departments of agriculture in Canada and Mexico issued a joint statement making clear their country’s intent to seek authorization to retaliate.
“In light of the WTO’s final decision, and due to the fact that this discriminatory measure remains in place, our governments will be seeking authorization from the WTO to take retaliatory measures against U.S. exports. We call on the United States to repeal COOL legislation and comply with its international obligations,” the statement read.
Canada and Mexico are the largest trading partners with the U.S., with bilateral trade with Canada totaling $658 billion in 2014 and $534 billion with Mexico that same year. That’s why Congressman Jim Costa (D-Calif.) supports the bill to repeal COOL.
“As we have seen time and again, mandatory Country of Origin Labeling is a misguided government policy that has damaged our trading relationships with Canada and Mexico and subjected the United States to trade retaliations,” said Costa. “We have the data, studies, and the World Trade Organization’s experience to demonstrate that COOL is detrimental to our state and national economies, and hurts our nation’s beef, pork and chicken producers and packers.”
National Cattlemen’s Beef Association (NCBA) President Philip Ellis, a cattleman from Wyoming, was also at the press conference to support the COOL repeal effort. Ellis said this action by Congress is long overdue.
“Continued economic analysis has shown that consumers do not use COOL information in their purchasing decisions, and despite implementation costs in excess of $1 billion for beef alone, these same reviews have found little or no economic benefit from this rule. It has resulted in discounts paid to U.S. producers like myself, and it is directly related to the closure of a number of processing plants and feedlots in the U.S,” said Ellis.
He continued, “Secretary Vilsack has said that the USDA is at a loss on how to fix this rule, given the statutory language, supporting what cattlemen have long maintained; there is no regulatory fix that will bring this rule into compliance with our international obligations,” said Ellis. “The only solution on the table is full repeal.”
He noted the association supports voluntary labeling efforts that provide consumers with additional information about the product while also rewarding producers for meeting certain market or brand specifications. Ellis highlighted branded programs like Born and Raised in the USA, Laura’s Lean and Nolan Ryan’s Guaranteed Tender as labeling programs that don’t violate trade obligations and also reward producers in the way of premiums.
The National Farmers Union, however, maintains its position that the legislation is not yet necessary.
“Congress may well have a role to play once the administration has worked with our trading partners following today’s decision if a statutory modification is deemed warranted by the administration, but the time for action is not now,” said NFU President Roger Johnson.