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U.S. House of Representatives votes to scrap COOL

Washington | Reuters — The U.S. House of Representatives on Wednesday evening voted to repeal meat labeling laws, which were widely backed by U.S. consumer groups, as Canada and Mexico threaten US$3 billion in trade sanctions.

The House voted 300-131 to repeal country-of-origin labeling (COOL) rules on beef, pork and poultry, after the World Trade Organization ruled they discriminated against imported meat.

If the laws are not reversed, and the WTO approves tariff proposals from Canada and Mexico, the U.S. could face costly retaliation from its closest trading partners.

Canada wants to impose just over US$2.4 billion in sanctions on U.S. imports while Mexico is looking for US$653 million worth of punitive measures. A WTO Dispute Settlement Body panel will review the two countries’ requests next Wednesday (June 17).

House Speaker John Boehner, in a statement after the vote, said “the last thing (U.S. farmers) need is for Congress to sit idly by as international bureaucrats seek to punish them through retaliatory trade policies that could devastate agriculture as well as other industries.”

Business groups are now urging the U.S. Senate to act swiftly to repeal the law. The chairman of the Senate committee on agriculture, Pat Roberts, said he was continuing to take suggestions from colleagues but thought repeal was the best option.

“We can sit here and let this happen. Or we can move. Let’s get a move on,” he said in a statement.

Some of the biggest U.S. food and beverage companies, including Pepsico, Tyson Foods, the U.S. arm of Nestle, Coca-Cola, Anheuser-Busch and Kraft Foods, wrote to lawmakers this week urging them to support the repeal.

Canada’s Agriculture Minister Gerry Ritz, in a statement late Wednesday, said the House of Representatives’ vote sends “a strong bipartisan message that COOL must be repealed once and for all.”

Ritz called the vote “a positive step” but also warned “the only way for the United States to avoid billions in retaliation by late summer is to ensure legislation repealing COOL passes the Senate” and is signed by President Barack Obama.

“Detrimental impact”

Passed by the U.S. government in 2008 and implemented in 2009, mandatory COOL required country-of-origin labelling for beef, pork, lamb, chicken and goat meat, and certain perishable commodities sold at retail outlets in the U.S.

The U.S. Department of Agriculture’s revisions to COOL in 2013 — which followed a WTO Appellate Body ruling against the law — further tightened COOL’s labeling provisions for muscle cuts of meat.

COOL today requires covered products’ labels to include even more specific information about where each production step (birth, raising, slaughter) took place.

For example, U.S. meat carries labels such as “Born, Raised and Slaughtered in the United States.” Meat from an animal born in Mexico, then shipped live to the U.S., would read “Born in Mexico, Raised and Slaughtered in the United States.”

A compliance panel of the WTO Dispute Settlement Body found the revised COOL rule “increases the original COOL measure’s detrimental impact on the competitive opportunities of imported Canadian livestock.” A WTO Appellate Body panel last month shot down a U.S. appeal of the compliance panel ruling.

U.S. consumer groups and some farm groups have supported the COOL requirement, saying shoppers should have information to be able to distinguish between U.S. and foreign products.

However, Canadian and Mexican livestock producers have said COOL, by compelling U.S. packers and processors to segregate imports from slaughter through to retail meat counters, has led to millions in discriminatory discounts on livestock entering the U.S.

The impact of COOL on the Canadian cattle and hog sectors was estimated in 2012 to be about C$1.1 billion per year, but Canadian livestock groups have said that impact has increased since the U.S. amended COOL.

Krista Hughes is a Reuters correspondent covering U.S. trade issues from Washington, D.C. Includes files from AGCanada.com Network staff.

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