U.S. meat industry groups want COOL repealed

Reuters — U.S. meat industry groups and packers have stepped up efforts to seek repeal of a law that requires products to have a country-of-origin label, citing increased costs and conflicts with trade partners, now that the Farm Bill passed by the House of Representatives on Wednesday keeps the COOL law in place.

The American Meat Institute, National Cattleman’s Beef Association, National Chicken Council, National Pork Producers Council, National Turkey Federation and North American Meat Association as well as big meat packers have all lobbied to have the new Farm Bill change the country of origin labeling (COOL) law.

But the House passed the farm bill, by 251 votes to 166, and it is headed to the Senate for a vote as early as Thursday.

“We had asked for a fix. Now, because that is not in the farm bill, we’re going to ask for a full repeal,” Dave Warner, spokesman for the National Pork Council said.

The industry has complained that COOL forces it to keep livestock and meat separated throughout the entire food processing chain, adding to costs.

Canada and Mexico are concerned that U.S. meat packers will stop sourcing livestock from outside of the U.S. Additionally, both countries have both complained to the World Trade Organization (WTO) about the current U.S. labeling law, saying it discriminates against their animals and products.

The U.S. Department of Agriculture tightened COOL’s labelling rules in May 2013, in response to rulings against it by the WTO’s Dispute Settlement Body (DSB) and Appellate Body in 2011 and 2012 respectively.

The WTO DSB has since agreed to requests from Canada and Mexico for a compliance panel, which will hear the two countries’ cases against the revised COOL on Feb. 18 and 19 at the WTO’s headquarters in Geneva.

If the two countries succeed in having the revised COOL ruled out of order, the Canadian Cattlemen’s Association has said it expects Canada to be in a position to apply retaliatory tariffs against U.S. goods in the first half of next year.

“Without additional value”

Tyson Foods, the largest U.S. meat processor, stopped buying slaughter-ready Canadian cattle in October 2013, due to increased costs associated with COOL labeling.

“This law has increased costs by requiring additional product codes, production breaks and product segregation without providing any additional value to our customers,” Gary Mickelson, spokesman for Tyson Foods, said.

Senate agriculture committee chairwoman Debbie Stabenow has said that if the WTO finds the U.S. COOL law illegal then it will be suspended, changed or repealed. The WTO dispute hearing is scheduled for Feb. 18.

COOL backers, including consumer groups and ranchers, say consumers have a right to know where their meat comes from.

The U.S. meat industry groups also fear retaliation, in the form of tariffs and other trade blocks, from both Canada and Mexico, Warner said.

U.S. agribusiness giant Cargill said the labeling law has resulted in significant costs to the American meat sector with no evidence of benefit.

“The prospect of US$2 billion in retaliatory tariffs from America’s NAFTA partners to the north and south, we believe Congress should revisit this issue,” said Michael Martin, Cargill spokesman, referring to WTO compliance.

— Meredith Davis reports on ag commodity markets for Reuters from Chicago. Includes files from AGCanada.com Network staff.

Related story:
No changes seen to COOL in new U.S. Farm Bill, Jan. 28, 2014

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