The Wrangle over COOL
November 30, 2017
The wrangle over Country of Origin Labeling (COOL) has gone on for over twenty years. After it was finally passed and implemented, our COOL law was disallowed by a World Trade Organization (WTO) tribunal prompting Congress, at the bidding of the meat packing cartel, to rescind COOL. But most cattle producers think COOL is a good idea and any consumer when asked if they would like to know the origin of their beef answers, "yes of course!"
The reason that COOL could be disallowed goes back to the North American Free Trade Association (NAFTA) rules that gives global corporations and foreign governments the right to challenge US laws and regulations that they claim interferes with their commercial interests. These Foreign Investor Rights Provisions are nothing more than a restriction on the Constitutional sovereignty of the American people, and an end run around the Tenth Amendment of the Constitution that says:
"The powers not delegated to the United States by the Constitution nor prohibited by it to the states, are reserved to the states respectively or to the people."
One of Donald Trump's campaign promises was to reform NAFTA or if that proves impossible to drop out of NAFTA completely. The administration has indeed opened up negotiations about the future of NAFTA and so far, our trade negotiators have held firm on repeal of Foreign Investor Rights. Needless to say, the global corporations are pushing back.
If you read between the "news" lines, the global corporate propaganda teams have mounted a full campaign to sell the benefits of "free trade" to the American people. Their major concern is the continuation of the Foreign Investor Rights because this gives corporations the power to challenge constraints imposed by nation states and ultimately frees them from the obligation to help fund that nation's infrastructure. In other words, they can disallow laws they do not like and do not have to pay taxes.
The recently announced agreement with China to lift a ban on US beef and buy cattle directly from Montana ranches looks suspiciously to be part of this propaganda effort. There is nothing wrong with China buying US beef. It can't hurt, but since we do not raise enough cattle to meet the domestic demand we will be needing to import more beef to make up the difference.
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What we don't know about this announced deal with a Chinese company is whether the cattle will be priced in an open public market or if it will be a vertically integrated system with no publicly derived price discovery. This arrangement with China could foster market competition but, probably, will result in more captive supply and speed the chickenization of the cattle industry.
Meanwhile Congress has been busy with what they tell us is tax reform. The center piece of the tax proposal is to lower the top corporate income tax rate from 35 percent to 20 percent. The rationale, we are told, is that by lowering corporate taxes we will encourage global corporations to re-patriate profits that they now keep in Caribbean tax havens.
The trade agreements, including NAFTA, openly encouraged the off shoring and outsourcing of manufacturing from the US to the country with the lowest labor costs and most lax environmental and consumer protection regulations. The next logical step was for the now global corporations to find ways to protect their profits from taxes. Most economists are skeptical that lowering the corporate tax rate will encourage the patriation of profits now safely residing in tax havens. The richest 1 percent, who own these global corporations, are no longer tied to any country, and have little reason to feel responsibility towards or contribute financially to any community of people.
However, not all manufacturing and business investments can be off-shored, particularly the selling of stuff. The implicit deal imbedded in the trade agreements is that the US encouraged the off-shoring of its manufacturing base, we also freely gave away our technological advances, and to top it all off, we allowed free access to the American consumers. What the American people got in return is the opportunity to buy a plethora of very cheap stuff. The assumption, we were told, was that the people who lost their jobs to off-shoring would find jobs in new high-tech industries and in retailing the stuff they used to make. This easily explains why the United States runs an annual trade deficit of half a trillion dollars and why so many people cannot find full time employment at a wage on which they can actually live.
Because corporations can off-shore much of what they do, this gives them tremendous leverage in negotiations with states and municipalities on their local tax responsibilities. In order to encourage global corporations to establish themselves in their locality, states and municipalities must bribe them with tax holidays. The most recent example in the news is the on-line retail giant Amazon's quest for a second administrative and distribution center. Wherever Amazon builds their new distribution center, they will not be taxed for road maintenance, expansion of schools to educate their employees' children, and the extra law enforcement needed to maintain security.
The point of all of this is to ask the question: who will pay for the infrastructure and services necessary to maintain modern and safe communities for our children? Those who have lost their livelihoods to off-shoring cannot pay taxes. The 1 percent who own half of the of the worlds assets will not pay taxes. It can only come from those who are lucky enough to have a job, a small business, or a farm or ranch. The trade agreements that the propagandists brilliantly labeled "Free Trade" has brought us to this stark reality. Congress may call what they are doing "tax reform" but it can only result in higher taxes for the middle class and fewer services and deteriorating infrastructure for everyone.
It all goes back to NAFTA and the other trade agreements that allowed corporations to go global and freed them from of the obligation to help pay for the national infrastructure. Eliminating the Investor Rights Provisions from NAFTA is a good first step. As citizens of the Unites States, and as members of the communities in which we live, we must restore our sovereignty to conduct our collective lives as we see fit. Foreign governments and global corporations should not have the right to overrule what we democratically choose to do.
COOL's demise at the hands of foreign countries, global corporations, and bought and payed for politicians, makes it a symbol of what is wrong with NAFTA. Perhaps, we can't fix everything that quickly or that easily, but as cattle producers, we can insist that beef that comes from cattle born and raised in the USA is labeled: Born and Raised in the USA.
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