Country of Origin Meat Labeling Repeal Bill in US Senate

Legislation introduced on July 23 in the US Senate by Agriculture Committee Chairman Pat Roberts (Republican of Kansas), would repeal country of origin labeling requirements for beef, pork and poultry and stave off trade retaliation from Canada and Mexico, a move hailed by the Washington, DC-headquartered National Pork Producers Council (NPPC).

The US Country of Origin Labeling (COOL) law requires meat to be labeled with the country where the animal from which it was derived was born, raised and harvested. This legal requirement also applies to fish, shellfish, frozen and non-frozen fruits and vegetables, and certain nuts.

The US House of Representatives in June passed on a 300-131 vote legislation repealing the COOL meat labeling provisions.

Intl tradeThe World Trade Organization (WTO) in May rejected an appeal by the United States of the international trade body’s October 2014 ruling that the COOL provisions on beef and pork discriminate against Canadian and Mexican animals that are sent to the United States to be fed out and processed. The WTO decision will allow punitive tariffs to be put on US goods going into Canada and Mexico, which are asking for a combined $3.1 billion in retaliation. A WTO arbitrator now is determining the level of retaliation.

“We’re grateful that Chairman Roberts recognizes that repeal of COOL meat labeling is the only move left, with retaliation from Canada and Mexico imminent,” said NPPC President Dr. Ron Prestage, a veterinarian and pork producer from Camden, South Carolina. “The United States had its day in court, and lost. We’re in the sentencing phase now, and without repeal, a sentence of up to $3 billion soon will be imposed on our exports.”

According to Iowa State University economist Dermot Hayes, the average US pork producer is expected to lose $10 per hog beginning later this year and into next year. Based on Hayes’s estimates, Prestage said retaliation from Canada and Mexico against US pork likely would double pork producer losses. “Retaliation would be devastating and undoubtedly would cause financial ruin for some pork producers,” he said.

Pork Export Value Tops $6.6 Billion
US pork producers have experienced significant export growth in the last two decades. Since 1989, sales have increased by over 1,500% to $6.67 billion in 2014. Exports helped add $63 to the price of each hog marketed last year.

Canada and Mexico are the third and second largest export markets, respectively, for US pork products. In 2014, US pork exports to Mexico generated $1.55 billion and exports to Canada fetched $904 million.

Voluntary Labeling Proposal
US-283x200A measure also introduced on July 23 by Senate Agriculture Committee Ranking Member Debbie Stabenow (Democrat of Michigan) would repeal mandatory meat labeling and replace it with a voluntary labeling program.

But because Stabenow’s bill – like the existing law – calls for labels to provide information on where animals are born, raised and slaughtered, it still would necessitate segregation of Canadian and Mexican livestock, leading to discrimination against them – a violation of international trade rules.

Canada issued a statement rejecting Stabenow’s voluntary approach and said it would continue to pursue retaliation. “The only acceptable outcome remains for the United States to repeal COOL,” said Canadian Agriculture Minister Gerry Ritz and International Trade Minister Ed Fast in a joint statement.

“While we appreciate Senator Stabenow’s efforts, we can’t support her bill because it would continue key features of a labeling regime that’s already been found to violate WTO rules,” NPPC’s Prestage said. “More importantly, it doesn’t satisfy Canada and Mexico, so it won’t stop retaliation, and we can’t afford to have our products restricted, through tariffs, to two of our top three markets.

“We don’t like it, Congress doesn’t like it, but the reality is that after four losses at the WTO, Canada and Mexico hold the cards.”

Although the United States could seek a WTO ruling on voluntary labeling or any other legislative proposal to which Canada and Mexico object, that process could take as long as two years, and Canada and Mexico likely would continue retaliating pending a decision. The current WTO arbitration panel will not review any new US COOL proposal, but only will determine the level of retaliation.

When the European Union in a WTO case on beef hormones said it was in compliance and asked the United States to drop its retaliation, the US refused to lift the retaliation. The EU’s only recourse was to file a WTO action to prove its compliance. The United States would find itself in a similar situation if it claimed a new COOL proposal brings it into WTO compliance, according to the NPPC.