COOL is hot
Recent actions in Washington affecting livestock producers:
• Hoeven (R-N.D.), Stabenow (D-Mich.) introduced voluntary COOL bill in Senate
• Roberts (R-Kan.) introduced bill to repeal COOL in Senate
• House passed the bill introduced by Rep. Mike Pompeo, (R-Kan.), that would stop states from establishing laws to require labeling of foods with genetically modified ingredients. The vote on H.R. 1599 – Safe and Accurate Food Labeling Act – was 275 to 150.
• U.S. Representatives Thomas Massie (R-Ky.) and Chellie Pingree (D-Maine) introduced legislation to make it easier for small farms and ranches to serve consumers. The PRIME (Processing Revival and Intrastate Meat Exemption) Act would give individual states freedom to permit intrastate distribution of custom-slaughtered meat such as beef, pork, or lamb, to consumers, restaurants, hotels, boarding houses, and grocery stores.
The Senate Finance Committee approved a tax extenders bill that includes tax breaks for biofuels and other tax provisions important to agriculture. The legislation includes two provisions known as Section 179 – small-business expensing and bonus depreciation.
Senate Appropriations Committee approved spending bill that included several key ag-related amendments to:
• Stop USDA from allowing imports of beef from Argentina and Brazil.
• Direct USDA’s Agricultural Research Service to improve animal welfare standards at its research stations.
• Continue a ban on inspection of horse meat for human consumption.
• Continue to stop USDA from reducing sodium levels further in school meals and to allow schools to request waivers from 100 percent whole grain rich requirements for bread, cereal and pasta products.
• Continue a policy of requiring labeling for genetically modified salmon if the Food and Drug Administration approves it.
House Appropriations Committee approved spending package that included:
• A requirement that certain conditions be met before beef from certain areas of Brazil and Argentina be approved for importation into the U.S.
• No rider (unlike recent years) prohibiting USDA’s Grain inspection, Packers and Stockyard Administration (GIPSA) from issuing certain regulations to ensure fairness in the marketing of livestock and poultry.
Last week ranchers across the country voiced a variety of thoughts on a topic that for years has elicited whispers, shouts and robust discussions. Country of origin labeling (COOL) was a hot topic Thursday, with two separate pieces of legislation being introduced in the Senate.
Senator Pat Roberts (R-Kan.), July 23, filed an amendment that calls for a full repeal of the current COOL law, to the Senate transportation bill. Co-sponsors to the Roberts bill are: John Cornyn, (R-Texas); Lamar Alexander, (R-Tenn.); John Boozman, (R-Ark.); Richard Burr, (R-N.C.); Tom Cotton, (R-Ark.); Cory Gardner, (R-Colo.); David Perdue, (R-Ga.); James Risch, (R-Idaho); Ben Sasse, (R-Neb.); and Thom Tillis, (R-N.C.). On June 10, the House of Representatives passed, 300 to 131, a bill similar to the Roberts language, to repeal the current mandatory COOL law.
On Thursday, U. S. Senators John Hoeven (R-N.D.) and Debbie Stabenow (D-Mich.) also released “Voluntary Country of Origin Labeling (COOL) Act of 2015 and Trade Enhancement Act.” It was co-sponsored by John Thune (R-S.D.), Amy Klobuchar (D-Minn.), Chuck Grassley (R-Iowa), Heidi Heitkamp (D-N.D.), Mike Enzi (R-WY) and Sherrod Brown (D-Ohio). Hoeven said they started with the House bill and added a voluntary component. The bill removes beef, pork, chicken, and ground meat from the mandatory country-of-origin labeling law and establishes a voluntary labeling program. The voluntary labels would include “born, raised and processed” information to avoid the U.S. label being placed on beef from imported cattle or imported carcasses.
Hoeven and Stabenow hope to get it passed with the highway bill, but if that doesn’t work, Stabenow said, they will work to find another way to try to get it passed. They are hoping for a vote by Friday, July 31, when the August recess starts.
“If consumers in Canada have the right to know where their food comes from through a voluntary labeling system, then American consumers should have the same. This bill is a path forward and will encourage international trade while giving families peace of mind,” Stabenow said in a press release.
In a press conference, Hoeven said that regardless of which bill is passed, the U.S. will be in the same negotiating position at the WTO, according to Darci Vetter, U.S. chief agricultural trade negotiator.
All three recent actions are said to be in response to four World Trade Organization rulings that declared the U.S. mandatory COOL law discriminatory. The fourth ruling against the U.S. COOL law came in May. In that ruling the WTO said the domestic COOL law discriminates against Canadian and Mexican producers who have found that U.S. slaughter plants restrict their purchase of animals from those countries because they must segregate them during slaughter to comply with the labeling rules.
But imports Ranchers-Cattlemen Action Legal Fund-United Stockgrowers of America CEO Bill Bullard said in a May statement that imports from Canada and Mexico under the COOL rule actually hit a seven-year high in 2014 and imported Canadian and Mexican cattle are commanding historically high prices, said.
However, Canadian officials don’t see such a sunny picture. Canada’s Agriculture Minister Gerry Ritz, and International Trade Minister Ed Fast Senator released a statement that said, “Stabenow’s COOL 2.0 fails to address Canada’s concerns and would continue to undermine our integrated North American supply chains. By continuing the segregation of and discrimination against Canadian cattle and hogs, Senator Stabenow’s measure will harm farmers, ranchers, packers, retailers and consumers on both sides of the border. This is contrary to successive World Trade Organization (WTO) decisions that have clearly ruled in Canada’s favour.
“The US Senate must follow the lead of the House of Representatives and put forward legislation that repeals COOL once and for all.”
But Senate Finance Committee ranking member Ron Wyden, (D-Ore.), supports the compromise legislation, saying that the parts of the law that were the basis of WTO inconsistency wouldn’t exist, so if Canada and Mexico continued with the arbitration, they would have to consider the new legislation. “Even if retaliation is authorized without regard to the new measure, WTO rules clearly state that retaliation is ‘temporary’ and a ‘last resort,’” Wyden said in a statement. “WTO rules require that members only apply retaliation until the WTO-inconsistency has been removed. Canada and Mexico are prohibited under WTO rules from exercising retaliation based on mere political objections to the new legislation. Retaliation is permissible only if Canada and Mexico disagree with the United States as to whether the new law constitutes compliance. In the event of a disagreement, the United States could ask for a WTO proceeding to terminate their retaliation rights.”
The U.S. Cattlemen’s Association supports mandatory COOL, but is open to alternatives. “USCA remains in firm support of mandatory country of origin labeling (COOL),” said USCA president Danni Beer in a press release. “However, given recent rulings at the World Trade Organization (WTO), we appreciate this bi-partisan legislation which maintains the integrity of COOL when utilized on a voluntary basis. COOL opponents have lauded full repeal as the only answer and avenue available on COOL; this is not the case. The Voluntary COOL Act of 2015 provides a constructive path forward on the issue that supports both U.S. producers and consumers.”
National Farmer’s Union also supports mandatory COOL, but is willing to consider the Stabenow bill. “This compromise maintains integrity of the ‘Made in the USA’ brand and will prevent the packers from deliberately deceiving consumers as they have in the past,” said NFU president Roger Johnson in a press release. “It’s a sad state of affairs that the WTO has stripped us of our sovereign right to label our food, but that is the reality of the current world we live in.”
While many industry groups support the compromise legislation, some are still advocating for full repeal.
In a statement, Philip Ellis, National Cattlemen’s Beef Association president, said Senator Stabenow’s amendment does not address all the issues with the program, and therefore is not a viable solution. “We greatly appreciate the support of Senator Roberts to repeal this program that has been burdensome to cattle producers for over a decade. The beef industry has many successful labeling programs already in place that consumers know, are willing to pay for, and that drive demand for U.S. beef. It is unfathomable that some are calling a program that forces our country into a trade war, and has a negative return-on-investment in the millions, a success worth keeping.”
The COOL Reform Committee also praised Roberts’ repeal bill. “In order to avoid retaliation by Mexico and Canada that would lead to irreparable harm of the U.S. economy and endanger thousands of American jobs, full repeal is the only option. This threat is very real as both Canada and Mexico have already begun the retaliation process. We urge the Senate to pass this amendment and bring this impending economic crisis to an end,” said the group of over 140 members.
From a third point of view, R-CALF USA is advocating for a less hasty conclusion for mandatory COOL. They say the WTO appeal process should be finalized before Congress reacts to threats.
Bullard has said there is still an arbitration process where Canada and Mexico actually have to prove they have suffered financial harm before the WTO will authorize those countries to impose retaliatory tariffs. His group has also called the WTO process unfair and un-American.
“It is alarming that the U.S. has agreed to allow non-judges at the WTO, who also are foreigners, to decide the fate of U.S. laws passed under the U.S. Constitution. These non-judges are not bound by U.S. judicial standards, not bound by U.S. due process standards, and there appears to be no concern whatsoever for blatant conflicts of interest, which is evidenced by the fact that a Mexican national served on the ruling COOL panel for the complaint brought by Mexico,” he said.
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