DURING the farm bill debate, Congress decided to punt on legislatively fixing the country-of-origin labeling (COOL) rule, which was found to be out of compliance with World Trade Organization rules.
Instead, it commissioned the U.S. Department of Agriculture to quantify the costs of the COOL rule while the WTO appeals process played out.
The results were not encouraging, with consumers and producers both paying a hefty price, to the tune of $8 billion in losses for the beef industry and $1.3 billion for the pork industry over 10 years.
In a report concerning compliance options, USDA acknowledged that if the U.S. loses its latest WTO appeal, the U.S. will have no choice but to repeal the COOL law or amend it by establishing a mandatory generic label for meat. No other options were offered.
Sen. Debbie Stabenow (D., Mich.), ranking member of the Senate Agriculture Committee, has said she supports a North American label to satisfy the concerns if WTO rules against the U.S.
House Agriculture Committee chairman Mike Conaway (R., Texas) said "there is no middle ground" and believes a full repeal of the COOL rule is the only viable solution to avoid retaliatory sanctions from Mexico and Canada.
"The call for a new generic mandatory meat label identifying meat as a product of North America does nothing to help producers, provides no useful information to consumers and, worse, does nothing to mitigate the threat of retaliation since the idea has already been rejected by our trading partners," Conaway said.
"If the governments of Canada and Mexico do not accept this option, retaliation would continue," he added. "Our trading partners have already said this option is unacceptable, so it is perplexing that USDA would ignore basic facts and put forward an approach that would only serve to exacerbate the current situation."
Conaway claimed that USDA lacks "a workable, trade-compliant solution, and producers, consumers and targeted industries deserve a straightforward response stating as much. In order to avoid what could be devastating retaliatory sanctions against U.S. businesses if we lose, the starting point needs to be that mandatory COOL for meat is a failed experiment that should be repealed."
Conaway said his committee is prepared to take the lead on the issue. He said the goal — shared by industry and consumers alike — is to provide stability, not create uncertainty.
The National Farmers Union (NFU) and other groups that have long supported mandatory origin labeling have urged Congress to let the WTO process play out.
"While the economic benefits of COOL may not translate into measurable increases in market-level consumer demand, USDA's analyses and comments, as well as decades' worth of polling, indicate substantial interest in COOL," NFU president Roger Johnson said.
He argued that even if WTO rules against COOL, arbitration would force Canada and Mexico to prove that they suffered economic harm as a result of COOL. NFU said results of a report from Auburn University suggest that Canada and Mexico may not be able to prove market losses.
A WTO panel is expected to decide on the COOL rule, which has gone through years of challenges, by May 18. Congress has a short window to decide what action to take and how quickly to proceed to fix the program.