U.S. meat producers fear Canada, Mexico COOL retaliation

Representatives from various meat and livestock associations told the Senate Agriculture Committee to get in line with House lawmakers and repeal mandatory country of origin labeling.    Representatives from various meat and livestock associations told the Senate Agriculture Committee to get in line with House lawmakers and repeal the mandatory country of origin labeling (COOL) rules, or face the wrath of Canadian and Mexican trade retaliation.
   “COOL is simply a protectionist measure intended to exclude or diminish the presence of Canadian and Mexican livestock from the U.S. market,” Barry Carpenter, president and chief executive officer of the North American Meat Institute, said to the committee Thursday. “It is and always has been a non-tariff barrier. Anyone ignoring this fact is not a serious participant in this discussion.”
   Since 2009, when the COOL rule was finalized, it has been burdensome for North American livestock and meat producers to identify U.S.-only or mixed origin meat, since so much livestock raising and meat production is conducted cross-border between the United States, Canada and Mexico. 
   The U.S. Department of Agriculture has calculated that COOL implementations for the beef and pork industries has cost more than $1.5 billion and diminished productivity by $200 million a year. Recent consumer research by Kansas State University found that a majority of U.S. consumers aren’t even aware of COOL for meat.
   “COOL is a failed experiment that has already cost the American livestock, packing, and processing industries billions of dollars and countless jobs,” Carpenter said.
   In May, a World Trade Organization Appellate Body issued a final rule finding the United States in non-compliance on its COOL rules. 
   The WTO concluded body concluded, “the recordkeeping and verification requirements of the amended COOL measure impose a disproportionate burden on producers and processors of livestock that cannot be explained by the need to provide origin information to consumers, and that the exemptions under the amended COOL measure support a conclusion that the detrimental impact of that measure on imported livestock does not stem exclusively from legitimate regulatory distinctions.”
   The decision marked the third time the WTO has found the U.S. mandatory COOL rules in violation of U.S. trade obligations.
   Canada and Mexico have lost patience with the United States and are prepared to collectively levy retaliatory tariffs of more than $3 billion on U.S. goods, including beef, pork, cherries, ethanol, wine, orange juice, jewelry, mattresses, furniture and parts for heating appliances.
   James Trezise, president of the New York Wine and Grape Foundation, told the Senate Agriculture Committee that if these retaliatory tariffs are allowed to take effect due to congressional inaction to amend COOL that the price of U.S. wines in Canada will “roughly double…overnight, drying up our sales and opening the door to competing wine regions from throughout the world.
   “Even if the increased tariffs were later dropped, the shelf space and restaurant wine listings would be long gone, requiring years of effort and huge investment to regain them, if that is even possible,” said Trezise.
   ADM Corn’s president, Christopher Cuddy, warned “if these valued neighbors and trade partners (Canada and Mexico) follow through on their threat to retaliate against U.S. products over the COOL rule, the economic impact across the food production, agriculture and manufacturing sectors could come to billions of dollars. We at ADM have calculated that the cost to our company alone would exceed $700 million per year.”
   The U.S. House of Representatives on June 12 passed legislation (H.R. 2393) by an vote of 300 to 131 to repeal certain COOL requirements for beef, pork and chicken. 
   Senate Agriculture Committee Chairman Pat Roberts, R-Kan., noted, “The House has moved quickly to prevent retaliation by repealing mandatory COOL for meat. Now the responsibility falls on us. The Senate must act prior to the WTO’s authorization of retaliation,” which could occur as soon as September. 
   “It is now up to the U.S. Senate to take constructive action to avoid imposing additional pain on U.S. exporters,” warned Gerry Ritz, Canada’s minister of agriculture and agri-food, in a statement. “The only way to avoid retaliation will be to end the segregation that discriminates against our livestock exports.”