A challenge to the Mandatory COOL rule issued by USDA’s Agricultural Marketing Service (AMS) on May 23 has been filed by six U.S. plaintiffs; American Association of Meat Processors, American Meat Institute, National Cattlemen's Beef Association, National Pork Producers Council, North American Meat Association and Southwest Meat Association and two Canadian plaintiffs; the Canadian Cattlemen’s Association and the Canadian Pork Council. No Mexican groups signed on to the suit. R-CALF, a long-time strong proponent of country of origin labeling, thought the suit was without merit.
The legal challenge to the USDA decision was announced during a Tuesday press conference by the lead plaintiff, the American Meat Institute. They’re asking for preliminary injunctive relief, citing irreparable harm to the industry if the ruling goes forward. The alternative would have been to wait until the World Trade Organization or U.S. Congress organization could act on the new ruling. A wise decision; WTO moves with all the speed of an Alaskan glacier in January, a politically paralyzed U.S. Congress doesn’t move at all. Any action taken during the lifetime of most participants will have to be up to American courts.
Defending the suit from north of the border, Canadian Pork Council Chair Jean-Guy Vincent said in a release, "This will likely lead to increased prices for consumers."
Canadian Cattlemen’s Association President Martin Unrau said, “The CCA is forced to take this step with its allies as the USDA chooses to continue down a path of unfair trade discrimination that undermines the job security of American workers and harms the U.S. meat processing industry in addition to placing an unfair burden on Canadian cattle producers.”
After losing their case with the World Trade Organization which ordered the United States to comply with WTO rules by May 23, the U.S. Department of Agriculture revised their COOL rules with wording that Canada and Mexico said would make the situation worse. A press release, co-signed by all participants in the suit, said, “In a highly illogical move, USDA made COOL requirements even more complex and discriminatory against foreign meat and livestock, and Canada and Mexico have already made clear that the new rule does nothing to ease the concerns that prompted their original complaint.”
In other words, as far as Canada and Mexico are concerned, the game is still on.
The Canadian government had already announced it would ask the WTO to approve proposed retaliatory measures against the U.S., including tariffs on meat, cherries, rice and other products. Mexico is considering suspending preferential trade tariffs with the United States over the dispute.
Mark Dopp, AMI’s V.P. Of Regulatory Affairs, discussing the suit during the press conference, said the new rules no longer allow co-mingling of most muscle cuts from livestock from different countries within the same package, which creates added cost to U.S. feedlots and processors who would be required to segregate animals, "When weighed against significant costs, we think this rule doesn't make any sense."
R-CALF’s Bill Bullard declared ‘stuff and nonsense’ when asked about the suit. Saying the “USDA set itself up for this lawsuit by choosing the more complicated modification option with which to comply with the WTO ruling. The WTO attacked COOL on the basis that it required more information from upstream suppliers (i.e., cattle producers) than was actually communicated to consumers via the label.
“…the WTO found that this imbalance between information required of producers and information communicated to consumers resulted in the discriminatory treatment of imported livestock. The U.S., therefore, could have addressed this criticism by either reducing the amount of information required of producers or increasing the amount of information communicated to consumers via a label.
“USDA chose the latter, more complicated option even though they knew it would increase the cost of COOL.”
When faced with the deadline to make COOL WTO-compliant, the USDA revisions required labels to include even more specific information about each of the production steps. The new rule removed the allowance for commingling of muscle cuts.
The original COOL regulations permitted a simple "Product of the U.S." label on cuts from animals born, raised, and slaughtered in the U.S. The new rule requires labels to read a more cumbersome "Born, Raised, and Slaughtered in the U.S." or if an animal was born in Canada, but raised in the U.S. before slaughter, the label would have to read "Born in Canada, Raised and Slaughtered in the U.S."
Indeed, groups like the North American Meat Association have a long history of working with the various American, Mexican and Canadian government agencies to consolidate the often arcane rules and regs controlling the North American meat industry, with the aim of making the flow of animals and products those countries as seamless as possible. Similar terminology and good practices would make movement of livestock and meat products between the three countries as smooth and pain-free as trade between Nebraska and Kansas.
Catherine Stetson, a partner with the international law firm Hogan Lovells, which was hired to handle the suit, said COOL violates the First Amendment to the U.S. Constitution, which "prohibits compelled-speech regimes in the absence of a substantial governmental interest." With no apparent connection to food safety issues, she maintained, there is no substantial government interest. She also added that a rule designed to merely satisfy ‘consumer curiosity’ is not within the realm of federal regulations, either.
The AMS acknowledges COOL could cost the meat industry as much as $192 million but the group claimed that in justifying the cost, the agency offered an anemic defense.
AMS claims the rule "will benefit consumers by providing them with more specific information on which to base their purchasing decisions but failed to explain how production-step information on meat labels influences purchasing decisions, and it did not endorse the notion that the information should have an influence at all."
To see an interesting AMI PowerPoint presentation explaining the history of COOL and the basis for the suit used during the press conference, go here: http://www.meatami.com/ht/a/GetDocumentAction/i/92227.
The opinions expressed in this column are solely those of Chuck Jolley, a veteran food industry journalist and columnist.