Report shows little economic benefit to COOL

WASHINGTON, May 2, 2015 – In Congressionally mandated correspondence to some of agriculture’s leading lawmakers, the Department of Agriculture said there is little economic benefit, but still consumer interest, in the country-of-origin labeling rule currently entangled in an international trade dispute.

The rule is awaiting a repeal ruling form the World Trade Organization after Canada and Mexico contended that requiring born, raised, and slaughtered information on meat labels accorded unfavorable treatment to Canadian and Mexican livestock. A WTO ruling is expected by May 18, giving interested parties about two weeks to consider options if the ruling goes against the U.S., which would allow Canada and Mexico to seek trade retaliation.

A potential option that has been considered by USDA and others is a generic mandatory label option, also known as a label communicating if meat is a product of North America. After receiving an economic analysis from USDA, vocal COOL opponent and House Agriculture Committee chair Mike Conaway, R-Texas, said this solution doesn’t solve the real issue.

“The call for a new generic mandatory meat label identifying meat as a product of North America does nothing to help producers, provides no useful information to consumers, and worse, it does nothing to mitigate the threat of retaliation since the idea has already been rejected by our trading partners,” Conaway said in a release, adding that “trading partners have already said this option is unacceptable.”

The economic report was mandated in the 2014 farm bill, and Congress directed Vilsack to provide guidance on COOL in the so-called cromnibus spending bill passed in December. Conaway was also critical of USDA’s approach, suggesting the department should be more blunt with the issue.

“It is perplexing that USDA would ignore basic facts and put forward an approach that would only serve to exacerbate the current situation,” Conaway said. “It is apparent that the department is void of a workable, trade-compliant solution and producers, consumers and targeted industries deserve a straight-forward response stating as much.”

In a statement, National Farmers Union President Roger Johnson reiterated his organization's often-stated perspective that the U.S. should allow the WTO process to be fully exhausted.

“Congress required USDA to send over a report before the WTO Appellate Body has even decided on COOL’s compliance,” Johnson said. “Even if the WTO rules against COOL, arbitration would force Canada and Mexico to prove they suffered economic harm as a result of COOL, which recent information suggests they will not be able to do. This recent USDA report is premature and Congress should not intervene at this point during the WTO process.”

Johnson added that despite the little economic benefit of COOL, the consumer’s right to know where their food comes from is “immeasurable.”

Conaway, who used his first speech on the floor of the House of Representatives to call for COOL repeal in 2005, has said his committee will take quick and decisive action to work to prevent trade sanctions.

“In order to avoid what could be devastating retaliatory sanctions against U.S. businesses if we lose, the starting point needs to be that mandatory COOL for meat is a failed experiment which should be repealed,” Conaway said. “The House Agriculture Committee is prepared to lead on this issue. Our goal, which is shared by industry and consumers alike, is to provide stability, not to create uncertainty.”

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