IT came as no surprise when the World Trade Organization handed down the ruling that the U.S. Department of Agriculture's mandatory country-of-origin labeling (COOL) rule favors livestock from the U.S. over those from Canada and Mexico, which successfully challenged the law.
During the farm bill debate, there was some support for including a legislative fix of the anticipated problems with the COOL rule. However, many leaders said it would be better to wait for a final WTO decision before moving forward on any legislative fix.
So, here we are again, with proponents and opponents of COOL both asking for either a regulatory fix from USDA — which could draw this out even longer — or a legislative fix — which requires Congress to act (and we know that can be an uphill battle).
National Farmers Union president Roger Johnson maintains that any changes to COOL should be done administratively. More than 30 senators believe that the U.S. government has the tools to address the WTO ruling and that legislation isn't needed. "Now is not the time to change the law. It is the time to see the WTO process through to an ultimate conclusion," Johnson said.
In a press briefing ahead of the announcement, Agriculture Secretary Tom Vilsack noted that "his job, as secretary, is to comply with the congressional directive so long as it remains the directive of Congress and to assure compliance with whatever decisions may emanate from the WTO."
To me, the political speak translates into Vilsack saying he's in a tight spot where he must follow the directive Congress gave him even though, in essence, it isn't allowing the U.S. to play by world trade rules. He's asking Congress to give him the tools to help mend those trading relationships.
Major meat groups, including the National Pork Producers Council and the National Cattlemen's Beef Assn., have gone as far as calling for an all-out repeal of COOL.
Members of a COOL Reform Coalition — comprised of a diverse group of associations and companies that represent the U.S. food, agriculture and manufacturing industries, including some of the same meat groups — have dialed back their request for a total repeal of COOL and instead called on Congress to immediately authorize and direct the secretary of agriculture to rescind the elements of COOL that were determined, by a final WTO adjudication, to be non-compliant with international trade obligations.
John Bode, president and chief executive officer of the Corn Refiners Assn., said waiting for a final adjudication could be disastrous for U.S. agriculture and other industries targeted by proposed tariffs. "It takes Congress so long to act that retaliation and loss of U.S. exports will surely occur. That's not a price we're willing to (pay)," he added.
Chuck Conner, president and CEO of the National Council of Farmer Cooperatives, said the coalition believes strongly in the need to honor trade rules. The implications of non-compliance could be huge, especially since trade with Canada and Mexico represent 25% of total U.S. agricultural exports.
The COOL Reform Coalition has been active on Capitol Hill, and Bode said when the U.S. violates trade obligations, it is problematic beyond WTO because "it puts in place terrible stands in other trade negotiations. For us to intentionally violate the ruling would just be shameful."