WTO: third ruling against COOL
May 19, 2015
Reacting to the World Trade Organization's release today of its third panel ruling critical of the U.S. program of country-of-origin labeling for red meat, the governments of Canada and Mexico and House Agriculture Committee Chairman Michael Conaway, R-Tex., called for repeal of the U.S. labeling regime.
But the Office of the U.S. Trade Representative said the agency would consider "all options going forward," Agriculture Secretary Tom Vilsack said Congress must act, and Senate Agriculture Committee Chairman Pat Roberts, R-Kan., said he would consider "any solution — including repeal regarding meat."
House Agriculture Committee ranking member Collin Peterson, D-Minn., said he would oppose repeal and Senate Agriculture ranking member Debbie Stabenow, D-Mich., said she wants a solution that protects both consumer information and international trade.
Meanwhile, groups with an interest in COOL issued news releases in line with previous statements.
Longtime opponents called for Congress to repeal the program for meat while groups that support it said the Obama administration should negotiate with Canada and Mexico to determine a retaliation level before Congress takes any action.
Canada and Mexico
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The governments of Canada and Mexico, which filed the World Trade Organization case against U.S. country-of-origin labeling for red meat, said they would ask the WTO for the right to retaliate and called for repeal of the U.S. program.
A joint statement was issued by Canadian International Trade Minister Ed Fast, Canadian Minister of Agriculture and Agri-Food Gerry Ritz, Mexican Secretary of Economy Ildefonso Guajardo Villarreal, and Mexican Secretary of Agriculture, Livestock, Rural Development, Fisheries and Food, Enrique Martínez y Martínez:
"Once again, the WTO has confirmed Canada and Mexico's long-standing position that the United States' mandatory COOL requirements for beef and pork are blatantly protectionist and are a violation of the United States' international trade obligations.
"The amended COOL measure, which causes Canadian and Mexican livestock and meat to be segregated from those of U.S. origin, is damaging to North America's supply chain and is harmful to producers and processors in all three countries.
"In light of the WTO's final decision, and due to the fact that this discriminatory measure remains in place, our governments will be seeking authorization from the WTO to take retaliatory measures against U.S. exports.
"We call on the United States to repeal COOL legislation and comply with its international obligations.
"The Canadian and Mexican governments will continue to work closely to resolve this important trade issue with the United States in order to protect our farmers and ranchers and maintain jobs and economic prosperity throughout North America."
In a separate statement, Fast and Ritz added, "In June 2013, Canada released a proposed list of targeted U.S. imports, and we are now preparing our request to retaliate."
"Our government stands on the side of Canadian farmers and ranchers, and we will continue to protect all hardworking Canadians throughout this retaliatory process."
Office of the U.S. Trade Representative
USTR Chief Counsel Tim Reif said in a statement that USTR will "consult with members and interested members of the public regarding possible next steps."
"While the [WTO] appellate body has again confirmed that the U.S. country of origin requirements for beef and pork are not more trade restrictive than necessary, the United States is disappointed that the appellate body confirmed the panels' finding that the requirements discriminate against Canadian and Mexican livestock," Reif said.
"We are considering all options going forward, and will continue to consult with members of Congress and interested members of the public regarding possible next steps."
Agriculture Secretary Tom Vilsack
Vilsack has said previously that USDA has run out of ways to propose changes to country-of-origin labeling, and a spokesperson today emphasized that Congress has to develop "a way to change the statute to resolve this matter."
"Country-of-origin labeling was passed to help consumers make informed purchasing decisions, and the WTO has confirmed that U.S. country of origin requirements for beef and pork are not more trade restrictive than necessary," the Vilsack spokesperson said.
"However, we are disappointed that the WTO confirmed their findings that the U.S. requirements as written in statute are not consistent with WTO obligations.
"USDA stands ready to continue to work with Congress and the Office of the U.S. Trade Representative as Congress develops a way to change the statute to resolve this matter."
House Agriculture Committee Chairman Conaway
Conaway said in a news release that he favors repeal, will hold a news conference with repeal advocates on Tuesday and will hold a committee business meeting Wednesday in an attempt to resolve the issue.
"Once again, the WTO has found COOL to be non-compliant — a decision we fully expected," Conaway said.
"As retaliation by Canada and Mexico becomes a reality, it is more important now than ever to act quickly to avoid a protracted trade war with our two largest trade partners. I have asked my colleagues on the Agriculture Committee to weigh in on resolving this issue once and for all during a business meeting this Wednesday in a targeted effort to remove ongoing uncertainty and to provide stability."
Senate Agriculture Committee Chairman Roberts
Roberts said he is ready to consider "any solution — including repeal regarding meat," but that he has concerns about a proposed generic North American label.
"As chairman of the Senate Agriculture Committee, I will consider any solution — including repeal regarding meat — that will allow the United States to be WTO-compliant and avoid retaliation from Canada and Mexico," Roberts said.
"As early as next month, Canada and Mexico may be given the green light to retaliate against the U.S. by way of implementing billions of dollars in tariffs on U.S. exports. Not only will meat be subject to tariffs, but also related U.S. industries will be hit with undeserved tariffs. Those costs will be passed on to consumers.
"I have long had concerns with COOL for meat. USDA's attempt to fix COOL was not enough, and we now know that those changes continue to be problematic in the eyes of the WTO. If Congress doesn't act swiftly, retaliation will wreak havoc on the U.S. economy.
"I have serious concerns that potential remedies suggested, such as the generic label, will not satisfy the Canadians and Mexicans and fail to halt impending retaliation."
Senate Agriculture Committee ranking member Debbie Stabenow
"Consumers have a right to know where their food comes from, and that's why I support country-of-origin labeling," Stabenow said.
"I am closely reviewing today's WTO decision. If adjustments are needed, we should find a bipartisan path forward that both protects the interests of consumers and encourages international trade."
COOL Reform Coalition
The COOL Reform Coalition, which includes U.S. food, agriculture and manufacturing industries worried about retaliation by Canada and Mexico, said that Congress should repeal the rule.
"WTO-authorized retaliation by two of the largest U.S. trading partners could result in very substantial tariffs affecting multiple sectors of the U.S. economy, threatening the livelihoods of American families who depend on U.S. manufacturing," said Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers, and co-chair of the COOL Reform Coalition.
"More than 95 percent of the world's consumers live outside of our borders," Dempsey said.
"We flaunt our country's obligations under the rules-based trading system at our peril," added John Murphy, the U.S. Chamber of Commerce senior vice president for international policy and co-chair of the COOL Reform Coalition.
U.S. Cattlemen's Association
The U.S. Cattlemen's Association, which favors labeling, said "the panel's findings allow Canada and Mexico to now file notification of their intent to retaliate; any filing done on their part will specify the retaliation amounts they believe are warranted."
"The U.S. may request arbitration on any requested levels of retaliation; the process to conduct all necessary protocol will take approximately 60 days," the group said.
"USCA will work with the administration and Congress to implement any necessary changes to COOL as required by today's ruling. We are committed to maintaining the information provided to consumers through the 'A' label, which distinguishes those products born, raised and harvested in the U.S., and will work to address any concerns or violations as ruled on by the WTO."
Consumer Federation of America
The Consumer Federation of America, which favors labeling, said it is too early for Congress to consider action.
"Today's final ruling by the World Trade Organization now puts in motion a WTO process to determine the level of sanctions Canada and Mexico can impose on the U.S. While Canada in particular has claimed high damages due to COOL, a study by Auburn University Professor Robert Taylor found that COOL had no impact on imports of cattle from Canada," said Chris Waldrop, director of the Food Policy Institute at the CFA.
"Since the process is ongoing and we do not yet know the level of possible sanctions, if any, it is premature for Congress to intervene," Waldrop added.
Food & Water Watch
"This is just the latest example of how multinational companies use the global trade system to attack basic protections for U.S. consumers," said Food & Water Watch Executive Director Wenonah Hauter.
"The meat industry has been trying — and failing — for years to get rid of COOL through the U.S. system, so it had to use unaccountable, unelected trade officials at the WTO to do its dirty work."
National Farmers Union
National Farmers Union President Roger Johnson said, "There is still ample opportunity for the administration, Mexico and Canada to negotiate an acceptable path forward."
Johnson, an advocate for labeling, said that NFU believes the U.S., Canadian and Mexican governments should negotiate to find a solution.
"Congress may well have a role to play once the administration has worked with our trading partners following today's decision if a statutory modification is deemed warranted by the administration, but the time for action is not now," said Johnson.
American Farm Bureau Federation
"Farm Bureau will carefully review the decision and then determine recommended actions," American Farm Bureau Federation President Stallman said. "We will work with Congress, USDA and USTR to reach the goal of an effective COOL program that conforms to international trade rules."
Farm Bureau supports a country-of-origin labeling program that adheres to appropriate parameters and meets WTO requirements, the group added.
–The Hagstrom Report