U.S. Cattlemen’s Association files comments on COOL rule

Farm Forum

USCA – The United States Cattlemen’s Association (USCA) filed comments on April 11 with the U.S. Department of Agriculture (USDA) on the agency’s proposed country of origin labeling (COOL) regulatory amendments to bring the U.S. into compliance with the World Trade Organization (WTO) Appellate Body’s rule on COOL. USCA’s filing, funded by a COOL Defense Fund coordinated by Leo McDonnell, Columbus, Mont., was a response to USDA’s request for public comments published in the March 12, 2013 Federal Register.

“USCA members are pleased with the Department of Agriculture’s proposed COOL rule and we urge the Department of Agriculture to adopt the proposed amendments as published,” said Jon Wooster, USCA President. “We extend our gratitude to the individuals who supported the COOL Defense Fund, which permitted USCA to vigorously defend our right to label products with country of origin.”

Canada and Mexico challenged the U.S. COOL law and regulations implementing the law in December 2008, arguing they violated U.S. obligations under the Agreement on Technical Barriers to Trade (TBT). Subsequently, a WTO Appellate Body found certain deficiencies in the U.S. law. The Appellate Body concluded that, while the U.S. has the right to label products, certain aspects of how the law is implemented violate the TBT Agreement.

USCA believes the proposed rule will bring the U.S. into compliance with the WTO decision by correcting the deficiencies in the regulatory program identified by the Appellate Body. In particular, the proposed rule requires that production steps now be identified on meat labels, thus providing the product information that the Appellate Body said is tracked but not communicated to consumers.

“The Appellate Body was concerned with a lack of proportionality between the information tracked due to producers’ record-keeping requirements on one hand, and the information conveyed to consumers through labeling, on the other hand,” noted Jon Wooster, USCA President. “USDA’s proposed rule changes ensure that the record-keeping requirements will be proportional to the consumer information provided, and thus, these requirements are justified by legitimate regulatory functions. This is sufficient to bring the U.S. into compliance.”

“Numerous polls and surveys demonstrate that consumers want and value country of origin information,” continued Wooster. “A 2002 survey of consumers in Chicago and Denver found that 75% of participants preferred to buy meat products labeled with country of origin as opposed to unlabeled product, with the preferences being strongest for beef products. A national poll in 2007 found that 94% of those surveyed believe consumers have a right to know the country of origin of the foods they purchase, and 85% of consumers say knowing where their food comes from is important. A 2012 survey found that consumers were willing to pay $1.77 more per 12 ounce portion for a meat product labeled ‘Product of the U.S.’ compared to an unlabeled product. It was the fact that the commingling flexibility deprives consumers of origin information that processors are already tracking that caused the Appellate Body to identify the flexibility as one of the deficiencies in the COOL program. Eliminating the commingling flexibility and ensuring that single-origin product is accurately labeled will benefit the consumers who value being able to purchase products with more precise labeling information and brings the U.S. into compliance.”

USCA’s comments note that no additional record-keeping will be required under the proposed rule because, under the 2009 COOL Final Rule, producers, packers and processors are already tracking origin. “USCA is very pleased that the proposed amendments to COOL regulations will not result in increased costs for producers or the production sector, nor will the proposed rule result in any increase in retail prices for consumers,” said Wooster.

The U.S. has until May 23, 2013 to notify the WTO that it has adopted regulatory changes.

At that time, Canada and/or Mexico can request consultations with the U.S. if they disagree. If those consultations are not successful, Canada and/or Mexico can request that the matter be referred to a compliance panel. If any party to the process is unsatisfied with the compliance panel report, they can appeal the decision to the Appellate Body. If Canada and/or Mexico wants to impose retaliatory sanctions, the countries must request authorization from the WTO dispute settlement body and identify a specific amount of financial harm. This process can also be arbitrated at the request of any of the parties involved. “This information should help dispel some of the rumors and distortion of the facts being circulated by COOL opponents,” said Wooster. “We are optimistic that USDA will adopt its proposed rule without changes and we stand ready to shepherd COOL through any further appeals should Canada or Mexico choose to do so.”