US Industry Eyes All Legislative Options for COOL Reform in Coming Weeks
A country-of-origin labeling (COOL) reform coalition is eyeing all legislative options in the coming months to give the Department of Agriculture authority to revoke portions of the U.S. COOL regime that the World Trade Organization determined violate global trade rules, said John Murphy, senior international policy executive at the U.S. Chamber of Commerce, a primary coalition member. The WTO paved the way for retaliatory tariffs against U.S. exports by siding with Canada and Mexico in mid-October (see 1410300020). The WTO agreed that U.S. labeling rules on meat muscle cuts, which restrict meat production from commingled cattle and hogs, discriminate against Canadian and Mexican livestock and production.
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Many U.S. traders and manufacturers have been scrambling since to avert Canadian and Mexican tariff hikes that could total more than an estimated $2 billion. “There aren’t a lot of legislative vehicles moving right now, but we’re open-minded where and how this can be done,” said Murphy, speaking on a panel at the Heritage Foundation on Nov. 5. “Sooner is always better than later, so we are looking at what opportunities are here. Again, it’s the day after the election and how the government will continue to be funded after the [continuing resolution] expires in early December is not altogether clear. I understand that there may be some appropriations bills taken up in some form or there may be a CR.” Canada and Mexico could implement retaliatory tariffs as early as Spring 2015.
Americans handed Republicans a huge victory at the polls on Nov. 4, boosting Republican ranks in both the House and the Senate. Both parties rallied together in September to keep the government funded at fiscal year 2014 levels through Dec. 11. Murphy’s comments suggest the COOL reform coalition may pressure lawmakers to add language to funding bills that will allow the Secretary of Agriculture to revoke portions of COOL.
The coalition is pushing, however, to ensure that any legislation related to the labeling is “contingent on an adverse final adjudication,” said Murphy, adding that COOL supporters are saying the trade community is getting ahead of itself in presuming the U.S. will not appeal the ruling. The U.S. still has roughly two weeks to appeal the WTO decision, but Murphy and others on the panel said that the WTO is unlikely to change its stance. An appeal would be a waste of time, said panelist said Ed Farrell, a partner at Blank Rome who represents the Canadian Cattlemen’s Association. “It’s very hard to see a path where the U.S. could prevail in appeal,” said Farrell, noting that the WTO ruled the regime violates both the national treatment provision under the General Agreement on Tariffs and Trade, as well as the Technical Barriers to Trade Agreement. “It would behoove everybody to save the expense of sending people to Geneva and briefing this thing, and just, you know, continuing the fight.”
The COOL regulations have damaged North American competitiveness since taking effect in 2009, the same year Canada and Mexico launched at WTO challenge against them, said the panelists. The North American meat industry is geographically intertwined and restrictions on commingling livestock level a real hit on production, the panelists added. Mexican retaliation against U.S. industry over a cross-border trucking dispute in recent years, which brought $2.4 billion in tariff hikes, is still fresh in the minds of industry representatives, said Murphy. Some U.S. farmers and activists insist the COOL rule is worthwhile because it allows U.S. consumers more access to information on the food they eat (see 1410240010).