The United States Senate needs to follow the lead of the U.S. House and approve a bill that would repeal country of origin labeling (COOL) laws, said Randy Russell, president of The Russell Group, an agricultural consulting firm.
Russell pointed out four reasons why the current COOL laws, which have been ruled unfair by the World Trade Organization (WTO) in a long-standing dispute between the United States and its neighbors, Canada and Mexico. The House on June 10 approved a bill to repeal COOL laws that affect labeling on pork, beef and poultry products, but the Senate has not yet voted on the matter, despite encouragement to do so from Sen. Pat Roberts, chairman of the Senate agriculture committee.
The reasons Russell believes U.S. COOL laws must be repealed are:
1. The economic costs of segregation – The heart and soul of the WTO COOL cost rests on the economic costs of segregation, said Russell. The tracking of livestock from birth to slaughter, segregating livestock and meat, and managing the supply chain throughout the entire system to ensure compliance with COOL laws places enormous costs on U.S. livestock producers and U.S. meat processors, Russell said. It also disadvantages Canada and Mexico by devaluing their livestock that is exported to the U.S., he said.
2. The burden of proof shifts to the United States -- Canada and Mexico have filed with the WTO to seek retaliation against the U.S. to the tune of more than $3 billion. Those requests were to be heard by a WTO panel on June 17. Once retaliatory levels are formally established and implemented, Russell said, they will stay in effect until Canada, Mexico and the WTO are all satisfied, which shifts the burden of proof to the United States. “This means COOL is not just a Congressional matter, but we must satisfy Canada, Mexico and the WTO,” Russell said.
3. There are no viable alternatives -- “There is no silver bullet. There is no magical solution. There is no third way. There doesn’t appear to be any other option to solve this case,” said Russell. While there has been talk in Washington about establishing a provision for a North American label that includes a U.S. origin label option, Russell said that option is still in violation of the WTO ruling. Another option, for a general North American label, he says provides no meaningful information to consumers.
4. Retaliation is a COOL tax on U.S. goods -- Once retaliation for not repealing COOL begins, it represents a tax on billions of dollars on U.S. products, said Russell. This includes dozens of products, both agricultural and non-agricultural, to two of the United States’ “largest and very best customers.” Russell said in the first year of any COOL tax, it will equal 9 to 10 billion because it goes retroactive back to May 2013.
Russell was one of several speakers featured in The Next Shoe to Drop: COOL and the Threat of Trade Retaliation, a forum hosted by the Global Business Dialogue Inc. and the National Pork Producers Council.