On December 2, a coalition of 207 organizations representing a broad segment of the United States economy, including farm, ranch, consumer, and manufacturing interests, delivered a letter to the Senate, urging Senate leaders to continue supporting the United States country of origin labeling (“COOL”) law, despite continued attack by the Canadian and Mexican governments at the World Trade Organization (“WTO”).
The group letter urges Congress “to reject any effort to weaken, suspend or rescind” the mandatory COOL law in the upcoming legislation to fund the federal government in fiscal year (FY) 2015. It follows a bipartisan letter signed by 32 Senators, which similarly urged Senate leaders to refrain from weakening or suspending COOL during the FY 2015 appropriations process. Doing so, the Senators wrote, would “short-circuit ongoing efforts to support American producers and consumers,” who “overwhelming[ly] … support” the law.
Mandatory COOL law origins
COOL is a labeling law that requires retailers like full-line grocery stores, supermarkets, and club warehouse stores to notify their customers regarding the source of certain foods. Food products covered by the law include muscle cut and ground meats, wild and farm-raised fish and shellfish, fresh and frozen fruits and vegetables, peanuts, pecans, macadamia nuts, and ginseng.
Congress enacted COOL in the 2002 and 2008 Farm Bills. Following an adverse WTO decision in 2012, the USDA decided to tighten COOL regulations regarding meat labeling in 2013. The following year, Congress expanded COOL coverage to additional products like venison in the 2014 Farm Bill.
The WTO dispute
Since its enactment, COOL has sparked staunch opposition on a number of fronts. Opponents of the law include foreign meat importers, multinational meatpackers and food processers, the Chamber of Commerce, the National Association of Manufacturers, and several foreign governments.
In December 2008, Canada and Mexico, joined by other major beef exporting countries like Brazil and Australia, filed complaints with the WTO. These foreign governments alleged that livestock from their respective countries received less favorable treatment than domestic livestock under a requirement that muscle cuts of meat be labeled with the country of origin. The U.S. defended this requirement by pointing to the right of consumers to know where their meat comes from.
In October of this year, the WTO agreed with Canada and Mexico, finding that COOL (as amended) violated certain WTO provisions by according imported Mexican and Canadian livestock less favorable treatment than domestic livestock, which detrimentally impacted the competitive opportunities of imported livestock in the United States. Some United States meatpackers, the WTO panel concluded, opted either not to purchase foreign livestock, or discounted foreign livestock because they had to be segregated to properly label the resulting meat.
Bill Bullard, R-CALF, attributes Canada and Mexico’s success at the WTO to help from the United States meatpacking industry. According to Bullard, United States meatpackers refuse to purchase, or impose discounts on, foreign livestock. This is exacerbated by the concentrated nature of the United States cattle market, where merely four meatpackers control about 85% of the fed cattle market – meaning that no alternative buyer exists to purchase the foreign livestock.
Appeal of WTO ruling
The Office of the United States Trade Representative (“USTR”) recently appealed the WTO ruling. As grounds for its appeal, the USTR argues that the WTO overestimated the costs and underestimated the benefits of mandatory COOL labeling.
The 200-plus coalition agrees that there are “strong grounds to appeal the most recent WTO ruling[.] . . . Congress should not short circuit the WTO process; nor should it unconditionally surrender to the threats of tariff retaliation by our trading partners.”
The USTR’s decision to appeal the WTO ruling might in part reflect strong support for COOL by federal courts. In particular, the District Court for the District of Columbia concluded that COOL was constitutional and consistent with United States law. Its decision was upheld twice on appeal by the DC Circuit.
Consumer right to know origins of their food
As additional support for COOL, the coalition pointed out that “American consumers are increasingly interested in understanding more about the origins of their food [.]” In this regard, “COOL labels . . . provide additional and more accurate information about where their food comes from,” thus enabling consumers “to make more informed purchasing decisions.”
More generally, the broad-based coalition of groups joining the December 2 letter evinces continued strong support for COOL from all sectors of the food system.