MANDATORY county-of-origin labeling (COOL) has been a divisive issue that has plagued both the countryside and the legislators debating the past two farm bills.
This year proves to be no different, but now, sanctions are looming if the World Trade Organization rules that the latest update to the COOL rule is trade distorting.
It has now been six months since the U.S. Department of Agriculture re-proposed the labeling rule, and the compliance date took effect Nov. 23. Opponents of the rule have attempted to delay its implementation until WTO rules on the merits of the rule, but they did not succeed.
Canada and Mexico have successfully challenged the COOL law requiring meat to be labeled as well as challenged USDA's latest update, which goes even further in having the label identify each step of the production process (e.g., born in Mexico and raised and slaughtered in the U.S.).
If they win their latest dispute, the U.S.'s top two trading partners plan to retaliate. Canada alone has threatened to react with up to $1 billion in retaliatory tariffs, many targeted at U.S. agricultural products.
In a Politico event Nov. 14, Agriculture Secretary Tom Vilsack noted that the WTO panel said the U.S. has a right to label but needs to be more specific. Vilsack said this latest COOL law provides that, and the WTO process "should play itself out" rather than having Congress inject itself into the situation now.
Dale Moore, executive director of public policy at the American Farm Bureau Federation, said COOL can be supported if it is WTO compliant, and "our belief is this needs to get resolved. We don't need retaliation with our best, biggest beef and pork export markets."
John Bode, chief executive officer at the Corn Refiners Assn., said staying the course on COOL, as Vilsack suggested, leaves the U.S. in a situation easily considered non-compliant and facing major retaliation from Canada and Mexico.
Corn refiners send $700 million of product per year to Mexico. Canada has indicated that it would retaliate against corn. With corn processing in Canada, there wouldn't be enough corn for the refineries.
"This is the sort of economic havoc that can result from failing to meet our trade obligations," Bode said. "I'm not opposed to COOL; just respectfully insist it be in line with our international trade obligations."
Minnesota Farmers Union president Doug Peterson said Canada "should leave COOL alone" as it is a law that has been tested and on the books for years. "Everyone sat here in the 2008 farm bill and signed off on it."
Ron Plain, an agricultural economist with the University of Missouri Extension, gave an update on COOL at the recent 2013 Missouri Swine Institute in Columbia, Mo. He told the audience that he expects WTO to rule against the U.S. COOL law again and believes the U.S. will appeal, so the proverbial can will keep being "kicked down the road."
For now, COOL is the law of the land. The National Agricultural Law Center hosted a webinar Nov. 14, "COOL or Not-So-COOL: Overview & Discussion of Country of Origin Labeling," where both sides of the issue gave their arguments. The presentations and discussion points for the rule are available at http://nationalaglawcenter.org/center-outreach/coolwebinar.