A World Trade Organization (WTO) dispute panel has released its preliminary report (beefmagazine.com/news/0524-WTO-prelimary-report-strikes-down-COOL), essentially agreeing with Canada and Mexico that U.S. country-of-origin-labeling (COOL) requirements violate the WTO’s Agreement on Technical Barriers to Trade. The results aren’t particularly surprising or unexpected. Nor will the decision precipitate any immediate change in mandatory COOL as the final ruling won’t be published until September.
Even then, however, the process of international trade is such that it will take additional time for the ramifications to take effect. Plus, the U.S. could choose to simply bear the penalties and continue as is. Thus, it could be a slow death for COOL.
But, hopefully the industry will learn from this experience. While everyone agrees that mandatory COOL hasn’t achieved its hoped-for goals, its proponents still argue that it was never implemented as they’d hoped it would. But, the battle between proponents and opponents resulted in a program that passed most of the costs on to foreign product but didn’t change the dynamic, as imports have increased with decreasing domestic supplies. Import prices have also risen to keep pace with the overall improving price structure of the industry.
Big-picture wise, the situation proves that the economic models from all the land-grant universities were valid; they knew what they were talking about. But this hasn’t dissuaded those who reject the economic models and claim that imports have devastated the marketplace.
The debate over the proposed GIPSA rules demonstrates that some people are still capable of rallying around the idea that the marketplace is being distorted, and that it isn’t supply and demand, but greed and fear that are driving prices. Yes, we must be vigilant in ensuring competition and a level playing field, but we can’t continue to chase non-issues at the expense of real factors that drive supply/demand relationships and have the potential to move the industry forward.
Looking at mandatory COOL and what appears to be its slow, gradual death, now’s a good time for the industry to step back and consider what the COOL debate cost the industry. Consider the amount of political capital expended on this effort and all the wasted time fighting among ourselves. And to what end?
Don’t get me wrong, I’m sure some really believed mandatory COOL was sustainable, that it would limit imports, and send prices for U.S. cattle higher as a result. But, many also believed that mandatory and forced marketing was improper and counterproductive, that the marketplace should be allowed to function as it was intended and designed, and that the cost/benefit analysis was skewed against producers instead of in their favor. Those opposing views persist even today, even after the results are in.
GIPSA and the checkoff fiasco illustrate just how easy it is for the industry to be taken down side paths and distracted from the big-picture items, consuming a tremendous amount of time and effort in the process. PETA and HSUS would love to replicate even a percentage of the damage that the industry inflicts upon itself with these internal fights.
It’s simply a failure of industry structure. Debate and differences are actually good things, but the problem comes when we don’t internally handle the debates and votes, choosing instead to wage the fight in outside channels. How did we ever forget that we all ride for the same brand and that building our industry, improving demand, and improving profitability are goals we all hold in common, despite our differences on how to get there?
Some might point to demagoguery of the issues, but we’ve also seen a shift to an “us vs. them” mentality. Rather than compromise through a democratic process, some have chosen to bolt to form a new organization or look for government mandates via legislation or regulation.
The sad thing about the clear lesson of mandatory COOL is that it appears we’re willing to continue choosing such paths again and again. I understand things change and I embrace positive change, but I really long for the good old days when disagreements didn’t break up our teamwork.
The lessons of mandatory COOL should serve to make it more obvious than ever that we can’t afford to waste so much time and effort fighting amongst ourselves rather than facing real issues and challenges. We are doomed if we continue to not speak with one voice in the halls of Congress and in the court of public opinion.
If we can learn our lesson, then mandatory COOL might just turn out to be a monumental success rather than a colossal failure.