US Introduces Bill to Repeal COOL; Canada, Mexico Reject Voluntary Approach

US - Legislation introduced by Senate Agriculture Committee Chairman Pat Roberts, would repeal country of origin labelling requirements for beef, pork and poultry and stave off trade retaliation from Canada and Mexico.
calendar icon 28 July 2015
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The US Country of Origin Labelling (COOL) law requires meat to be labelled with the country where the animal from which it was derived was born, raised and harvested. It also applies to fish, shellfish, fresh and frozen fruits and vegetables and certain nuts.

The World Trade Organisation (WTO) in May rejected an appeal by the United States of the international trade body’s October 2014 ruling that the COOL provisions on beef and pork discriminate against Canadian and Mexican animals that are sent to the United States to be fed out and processed.

The WTO decision will allow punitive tariffs to be put on US goods going into Canada and Mexico, which are asking for a combined $3.1 billion in retaliation. A WTO arbitrator now is determining the level of retaliation.

“We’re grateful that Chairman Roberts recognises that repeal of COOL meat labelling is the only move left, with retaliation from Canada and Mexico imminent,” said National Pork Producers Council (NPPC) President Dr Ron Prestage, a veterinarian and pork producer from Camden, South Carolina.

“The United States had its day in court, and it lost. We’re in the sentencing phase now, and without repeal, a sentence of up to $3 billion soon will be imposed on our exports.”

According to Iowa State University economist Dermot Hayes, the average US pork producer is expected to lose $10 per hog beginning later this year and into next year.

Based on Mr Hayes’ estimates, Dr Prestage said retaliation from Canada and Mexico against US pork likely would double pork producer losses.

“Retaliation would be devastating and undoubtedly would cause financial ruin for some pork producers,” he said.

A measure also introduced today by Senate Agriculture Committee Ranking Member Debbie Stabenow, would repeal mandatory meat labelling and replace it with a voluntary labelling programme.

But because Ms Stabenow’s bill – like the existing law – calls for labels to provide information on where animals are born, raised and slaughtered, it still would necessitate segregation of Canadian and Mexican livestock, leading to discrimination against them – a violation of international trade rules.

Canada issued a statement rejecting Ms Stabenow’s voluntary approach and said it would continue to pursue retaliation.

“The only acceptable outcome remains for the United States to repeal COOL,” said Canadian Agriculture Minister Gerry Ritz and International Trade Minister Ed Fast.

“While we appreciate Sen. Stabenow’s efforts, we can’t support her bill because it would continue key features of a labelling regime that’s already been found to violate WTO rules,” NPPC’s Dr Prestage said.

“More importantly, it doesn’t satisfy Canada and Mexico, so it won’t stop retaliation, and we can’t afford to have our products restricted, through tariffs, to two of our top three markets.

“We don’t like it, Congress doesn’t like it, but the reality is that after four losses at the WTO, Canada and Mexico hold the cards.”

Although the United States could seek a WTO ruling on voluntary labelling or any other legislative proposal to which Canada and Mexico object, that process could take as long as two years, and Canada and Mexico likely would continue retaliating pending a decision.

The current WTO arbitration panel will not review any new US COOL proposal but only will determine the level of retaliation.

Looking at a similar case, when the European Union in a WTO case on beef hormones said it was in compliance and asked the United States to drop its retaliation, the United States refused to lift the retaliation.

The EU’s only recourse in that situation was to file a WTO action to prove its compliance. The United States would find itself in a similar situation if it claimed a new COOL proposal brings it into WTO compliance.

The House in June passed on a 300-131 vote legislation repealing the COOL meat labelling provisions.

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