U.S. Senate may repeal COOL
Eight-year battle over labelling beef and pork products comes to a head
Agriculture Minister Lyle Stewart says there’s a 50-50 chance that the U.S. Senate will repeal Country of Origin Labeling (COOL) rules on Wednesday and thus avoid more than $1.2 billion in retaliatory tariffs on U.S. exports by Canada and Mexico.
“Right now, there’s an omnibus bill being prepared for the (U.S.) Senate for Wednesday,’’ Stewart told reporters Monday. “That omnibus bill includes funding to keep the government of the United States of America operating and the hope is that COOL repeal can be rolled into that omnibus bill.’’
Stewart said house leaders of the Senate and the House of Representatives were working on the omnibus bill, with a deadline of midnight Monday, but there’s no guarantee that COOL will be repealed.
“Five years ago, I would have been extremely optimistic, but we’ve been disappointed a number of times. So I guess I’m less optimistic now, but still very hopeful.’’
Earlier this month, the World Trade Organization (WTO) ruled that COOL, which requires U.S. food processors to label beef and pork products originating outside the U.S., caused damage to Canada and Mexico. Canada can retaliate by imposing tariffs totalling $1.054 billion against U.S. exports, while Mexico can impose retaliatory tariffs of US$227.7 million, according to the WTO.
Since 2011, the WTO has repeatedly ruled that COOL requirements for beef and pork are discriminatory and in violation of the United States’ international trade obligations. The U.S. House of Representatives repealed COOL for beef and pork last June, and the U.S. Senate must act this week to avoid retaliation against U.S. exports.
Last week, Prime Minister Justin Trudeau says he’s prepared to impose retaliatory tariffs on U.S. goods if Congress fails to repeal labelling laws that have complicated Canadian meat exports. Trudeau said he’s committed to the plan for more than $1 billion in punitive measures established under the previous Conservative government — unless American legislators move.
Stewart said if the Senate doesn’t repeal COOL, then the federal government must retaliate. “We’ll be encouraging the federal government to proceed immediately with retaliatory actions.”
But Stewart said embarking on a trade war with your largest trading partner is “not a choice any of us takes lightly. Trade retaliation is a last resort, but don’t forget we’ve been fighting this fight for eight years. The WTO has ruled the U.S. to be in non-compliance with the rules four times.’’
Stewart said the products that would be selected for retaliatory tariffs tend to come from those states that have supported COOL for years. Those products could include California wine, Florida orange juice, and North Dakota beef.
One of the main proponents of meat-labelling is Michigan Democrat Debbie Stabenow, who partnered with a North Dakota Republican, John Hoeven, to author a watered-down, voluntary version of COOL, but their bill hasn’t advanced either.
Proponents say COOL is a fair way of letting consumers know where their food comes from. Opponents say COOL has nothing to do with food safety, which is monitored by inspections. They argue that COOL is just disguised protectionism — a system that forces U.S. importers to spend extra money to separate foreign and domestic livestock, drives up the cost of imports and makes them less competitive.
Canada is getting support from some powerful American corporate interests. About 250 U.S. companies and trade associations have sent a letter to every member of the U.S. Senate, urging them to heed Canadian and Mexican concerns.
Stewart said this is probably Canada’s last hope for the U.S. to repeal COOL before the presidential election in November 2016. “This is the last chance we’ll have to see COOL repealed for some time.”
Five years ago, I would have been extremely optimistic, but we’ve been disappointed a number of times. So I guess I’m less optimistic now, but still very hopeful.