We now have answers on at least two important issues for livestock producers but the answers are: We must wait some time for them to be resolved.
No one expects the Senate, now in recess, to head off retaliation with no “must pass” legislation available to which to attach a mCOOL repeal amendment. Certain Senators and the leadership would have to demonstrate some real interest in avoiding serious disruptions to livestock, manufacturing and food segments of the economy and, up to this point, that has not been the case.
The other issue that might have reached a major milestone in recent days was the Trans-Pacific Partnership (TPP) treaty. It was widely hoped that the remaining difficult issues would be resolved at their end-of-July negotiations and the treaty could go back to the partner countries for ratification. With U.S. elections coming up next year, it was hoped the TPP ratification fight could happen this year or early next at the latest to avoid being caught up in election year bickering, political moves and non-action. No such luck. The talks broke up without resolution on certain key issues and no next meeting is yet scheduled.
Only the most ardent administration supporters are pretending that the U.S. economy is anything but a near dud. Most industries are treading water, keeping cash on hand, seeing no prudent justification for major expansion. More Americans are unemployed or underemployed than ever in history.
So it is a bit surprising that the potential impact of retaliatory tariffs with two of our biggest trading partners and our only two neighbors is getting slight attention. Country of origin labeling -- for all intents and purposes, already a settled issue -- does not seem like the issue on which we should run the economy aground.
Part of the problem is that those senators who would have the clout to get leadership on board and get this resolved don’t seem to understand some basic facts about food.
Labels on food are highly regulated, closely watched by inspectors and carry with them some serious legal and economic implications if something on that label is found to be false. Forget the orange “Great for Grilling” or “Crockpot ready” labels retailers put on meat packages for consumer guidance. The official label, the one that counts, is the one the shows species, primal and cut, the weight, the price and, for now, the country of origin of that piece of meat.
If you are a retailer, you have a slew of meat suppliers, butchers, lawyers, insurance advisors, scale technicians, government label experts, and others making sure every letter on that label is correct, right on down to the size of the type and position of each word. Because if one of Uncle Sam’s inspectors finds out it’s not, a retailer is out tons of money in such things as pulled product, fines, additional audits and lawsuits. Ask Whole Foods in New York state about the hassles to be endured if something is wrong.
That is why it is a colossal falsehood to say -- and I’ve heard the words come out of the mouths of farmers, consumer advocates and politicians -- “It’s just a label” or “It’s just a couple words added to the label.” The addition of a country’s name to the label or the absence of that country’s name, carries huge legal, regulatory, logistical and liability implications. Every word on that label must be true, the retailer must be able to prove that it’s true with records, it must be auditable and the company’s legal and insurance departments are supposed to make sure it is. The label can’t say it is U.S. beef without the records to back that up. It can’t say it has spent part of its life in Canada or Mexico without the records and the audit trail along the route of the live animal, the carcass, the primal and each piece of meat cut from that primal to prove that. It’s not just a word added to the label.
That is why in the tightest supply situation packers have found themselves in decades, most of the big packing plants bought no cattle with either Canadian or Mexican origin. The liabilities are serious considerations, the cost of making sure an individual piece of meat has been tracked and segregated all during its existence is large, the remodeling of plant facilities is expensive and the cost of total shutdown, total cleaning, non-productive hours, extra cattle holding plus the box and package tracking necessary to be able to prove the origin of a piece of meat in a multi-country plant is very expensive.
Customers are always right and can demand whatever they want. But they must be willing to pay for the desired characteristics. If they want to know what country a hamburger or pork chop came from, they can have that desire. But they will have to pay for a lot of work and special attention to get it in today’s global market.
The other quote from the naïve is that “consumers have a right to know where their food comes from.” As for their “right,” re-read the above paragraphs. There is nothing in the Constitution that gives them further legal right to know where anything comes from, beyond basic food safety and the truth in labeling regulations; their French wine better have come from France, their Italian cheese from Italy.
The serious implication underlying country of origin labeling is that statement has some bearing on food safety. That is not true and the politician or consumer activist who uses that implication to mask other intentions is guilty of mislabeling an issue, misleading the consumer and impugning the integrity of the company involved. Meat imported into the U.S. must be produced under USDA inspection in the country where it was slaughtered and processed or under what USDA deems an approved, USDA-equivalent inspection system.
That is why Sen. Stabenow’s “voluntary” program will not be truthful without taking the necessary steps to prove the label, thus Canada’s refusal to accept it. Now we sit for five weeks while the retaliation clock ticks and serious problems get nearer.
We hope certain senators listen to livestock producers and winemakers and a host of other businesspeople who stand to get hammered in October unless the Senate acts.
As for TPP, while most countries agreed a lot of progress had been made, the things expected to be sticking points going in were the things left unresolved when negotiations ended. They include:
- Access to the markets of Canada, Mexico and the U.S. for New Zealand and Australian dairy producers.
- Duties for Japanese auto parts coming into the U.S.
- Access for Australian cane sugar producers to the U.S.
- Rules of origin and tariffs for auto parts going into Japan.
- U.S. and intellectual property protection for certain types of U.S. drugs.
There were significant political pressures from farmers at home in New Zealand and Australia to gain more access from a TPP deal. They were not mentioned in the reports we saw but certainly a factor are Canadian elections coming this October. The Canadian government would not want to be perceived as failing to give their dairy producers enough protection going into an election.
So perhaps the guesses by some observers that TPP talks could resume in November could give negotiations a little more breathing room from Canada’s perspective. The problem is the approach by then of the U.S. 2016 election season.