In advance of this Thursday’s Senate Agriculture Committee hearing on country of origin labeling for meat products, Sen. Debbie Stabenow (D., Mich.) released a draft proposal which would remove beef and pork mandatory labeling provisions under COOL and put in its place a completely voluntary Product of the U.S. label.
Stabenow said she hopes her proposal offers a pathway forward on COOL following a May World Trade Organization ruling which found the United States again out of compliance.
“This proposal offers a viable alternative and I look forward to discussing it at our hearing and with my colleagues in the Senate as we work to come to agreement on a bipartisan solution,” she said.
Her Republican counterpart on the committee Sen. Pat Roberts sent out a fact sheet Tuesday outlining the costs of retaliation and that repeal is the “only solution” for Canada & Mexico. It also noted that the timeline on action is urgent as the “WTO determination process is uncertain and can take a minimum months, potentially longer.” Canada and Mexico have issued $3.2 billion in retaliation authorization requests which could go into effect as soon as August.
House Agriculture Committee chairman Michael Conaway (R., Texas) said any conversation about a voluntary program must be preceded by a full repeal of COOL because of the U.S. obligation to trading partners to come into compliance. Earlier this month the House voted 300 – 131 in favor of fully repealing labeling provisions for beef, pork and chicken.
“By leaving in place a host of federally mandated requirements, Sen. Stabenow’s bill still creates unnecessary compliance costs and prolongs this failed experiment,” Conaway said.
The National Farmers Union, one of the long-term supporters of COOL and have continually called for the WTO arbitration process to play out, said they supports Stabenow’s proposal that would make COOL voluntary for beef and pork.
“A voluntary approach for beef and pork is a prescriptive solution to a very narrow problem identified by the World Trade Organization,” said NFU president Roger Johnson. “Furthermore, this approach is in concert with Canada’s own voluntary meat labeling process.”
WTO process update
On June 17, the World Trade Organization (WTO) held a special Dispute Settlement Body (DSB) meeting at which Canada requested authority to retaliate against the U.S. regarding mandatory Country of Origin Labeling (COOL). Canada requested authorization to impose tariffs on more than $2.6 billion per year of U.S. exports. The U.S. objected to the dollar amount presented by Canada and requested arbitration.
Mexico will seek authorization for over US$713 million in retaliatory tariffs in a separate DSB meeting that has been scheduled for June 29.
The next step will be for the arbitration panel to be appointed. If the panelists from the original WTO panel (who also served for the WTO compliance panel in 2014) are available, the arbitration panel should be formed quickly and a schedule provided.
As soon as the WTO arbitration is complete and the arbitrator’s report is issued - likely later this summer - Canada and Mexico will be in a position to implement retaliatory tariffs on key U.S. exports. At that point, all decisions will rest entirely with Canada and Mexico. The Government of Canada and Mexico will decide when the tariffs go on, how high they will be, which products will be affected, whether they will be rotated to cover additional products and under what conditions the tariffs will be removed. WTO concurrence is not required for these decisions.