WTO Rules Against COOL
The appellate body of the World Trade Organization announced Monday that it has ruled against a U.S. appeal of an earlier decision that the U.S. Country of Origin Labeling (COOL) law treats Canadian beef and pork and Mexican beef unfairly. The announcement drew immediate promises from some leaders in Congress that the COOL law passed with the 2008 Farm Bill must be appealed. And opponents of free trade cited the ruling as an example of why the Obama Administration’s current efforts to negotiate a Trans-Pacific Partnership should be opposed.
Canada began the WTO trade dispute over COOL in 2008, with Mexico joining that year. In 2013, USDA revised its regulations for COOL, but the WTO ruled against the U.S. in 2014.
“The appellate body maintained the panel's conclusions that the amended COOL measure increases the record-keeping burden for imported livestock entailed by the original COOL measure,” the WTO said Monday.
COOL still has the support of two general farm organizations, the American Farm Bureau Federation and the National Farmers Union (NFU).
The WTO ruling “means we need further effort to craft an acceptable COOL program,” said Farm Bureau President Bob Stallman. “Farm Bureau will carefully review the decision and then determine recommended actions. We will work with Congress, USDA, and USTR to reach the goal of an effective COOL program that conforms to international trade rules.”
“As we have seen in other disputes, once decisions are handed down, WTO members often work together to find a solution that will work for them,” said NFU President Roger Johnson. “In this case, such a solution must involve continuation of a meaningful country-of-origin labeling requirement.”
House Agriculture Committee Chairman Michael Conaway (R-TX) has promised a bill to repeal COOL, and he has organized a press conference on the bill tomorrow, along with representatives of U.S. Chamber of Commerce, National Pork Producers Council, and National Cattlemen’s Beef Association. On Wednesday, the Ag Committee will consider the repeal bill.
“Once again, the WTO has found COOL to be noncompliant – a decision we fully expected,” Conaway said in a press release. “As retaliation by Canada and Mexico becomes a reality, it is more important now than ever to act quickly to avoid a protracted trade war with our two largest trade partners. I have asked my colleagues on the Agriculture Committee to weigh in on resolving this issue once and for all during a business meeting this Wednesday in a targeted effort to remove ongoing uncertainty and to provide stability.”
Repeal doesn’t have support from the committee’s ranking Democrat and former chairman, Collin Peterson of Minnesota.
“I am disappointed in today’s ruling and will oppose efforts to fully repeal COOL. There are still several steps in the WTO process that must be met before any retaliation could go into effect, so we should take the time to thoughtfully consider how to move forward,” Peterson said.
Opponents of pending trade legislation used the WTO ruling as a reason to be skeptical of new trade agreements being negotiated by the Obama Administration.
“Beyond the implication for consumers, this ruling brings up troubling implications for our international trade agreements,” said Congresswoman Rosa DeLauro (D-CT). “The administration has claimed that deals like the Trans-Pacific Partnership (TPP) would not force us to change our laws or regulations. Today’s decision is proof that they are wrong.”
COOL has support in the Senate, too. Senator Heidi Heitkamp (D-ND) on Monday said “I’ll work to find a bipartisan path forward in the Senate that supports North Dakota ranchers and producers and makes sure this law continues to help families throughout America, while meeting our international trade obligations.”
Heitkamp said that she “beat back efforts to repeal COOL” when she helped write, negotiate, and pass into law the 2014 Farm Bill. Last October, Heitkamp joined a group of bipartisan Senators urging the Senate Appropriations Committee to reject efforts to weaken or suspend COOL in any future appropriations bills or continuing resolutions.
Groups that oppose COOL cite potential trade retaliation as a reason for repealing it.
“Unless Congress acts now, Canada and Mexico will put tariffs on dozens of U.S. products,” said NPPC President Ron Prestage, a veterinarian and pork producer from Camden, S.C. “That’s a death sentence for U.S. jobs and exports.
NFU’s Roger Johnson is skeptical of how much retaliation may take place.
“While those who have opposed giving consumers more information on where their meat products are from have focused on potential retaliation, retaliation is relevant only if the parties cannot reach an agreement on how to move forward and then only after an arbitration process,” said Johnson. “And the amount of any retaliation is by definition speculative at best and aimed to raise alarm where none is warranted.”