USDA's proposed rule to bring mandatory COOL into compliance with the World Trade Organization will likely make matters worse while adding more cost to the system.
“Only the government could take a costly, cumbersome rule like mandatory country-of-origin labeling (COOL) and make it worse even as it claims to fix it,” said J. Patrick Boyle, president of the American Meat Institute (AMI). “That’s exactly what they are doing with a new proposed rule that purportedly aims to bring the law into compliance with U.S. obligations under the World Trade Organization (WTO).”
Boyle is speaking to USDA’s recently published proposed rule that would modify the mandatory COOL labeling provisions for muscle cuts of stipulated commodities to require the origin designations to include information about where each of the production steps occurred (i.e., born, raised, slaughtered). It also would remove the allowance for commingling of muscle cuts.
Apparently, the proposed rule is how USDA aims to comply with the WTO ruling that U.S. COOL requirements for certain meat commodities discriminate against Canadian and Mexican livestock imports, and thus are inconsistent with the WTO Agreement on Technical Barriers to Trade. The U.S. has until May 23, 2013, to comply with the WTO ruling on COOL.
“The proposed rule is even more onerous, disruptive and expensive than the current regulation implemented in 2009,” Boyle explains. “Complying with this proposal, should it become mandatory, will create more excessive costs that will be passed on to consumers.”
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When USDA issued the rule, Canadian Agriculture Minister Gerry Ritz responded by saying, “Our government is extremely disappointed with the proposed regulatory changes put forward by the U.S. with respect to country-of-origin labeling. We do not believe that the proposed changes will bring the U.S. into compliance with its WTO obligations. The proposed changes will increase the discrimination against exports of cattle and hogs from Canada and increase damages to the Canadian industry. Our government will consider all options, including retaliatory measures, should the U.S. not achieve compliance by May 23, 2013, as mandated by the WTO.”
Among those options, logic suggests that tariffs for U.S. beef and pork imports might be a logical tool of retaliation. Keep in mind, Canada was the largest export customer for U.S. beef last year; Mexico was the third-largest.
According to Boyle, “The bottom line: mandatory COOL is conceptually flawed, in our view and in the eyes of our trading partners. The anti-free trade objectives of this labeling scheme’s proponents are no secret. Requiring us now to provide even more information at a greater cost when evidence shows consumers, by and large, are not reading the current country-of-origin information, is an ill-conceived public policy option.”
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