Legislation Introduced in House to Repeal COOL

Taylor Hillman Cattle

After over a decade and two administrations failing to successfully implement the rule, House Agriculture Committee Chairman Conaway (R-Texas) introduced legislation (H.R. 2393) to repeal Country of Origin Labeling.

Originally introduced in the 2002 Farm Bill covering beef, pork and chicken; and implemented in 2008, COOL has been detrimental to the U.S. livestock industry and without benefit to U.S. consumers. After multiple rulings against the U.S. by the World Trade Organization, National Cattlemen’s Beef Association President and Chugwater, Wyoming, cattleman, Philip Ellis said this action by Congress is long overdue.

“As a fifth-generation rancher I am proud of the products we produce and we produce the best beef in the world, but mandatory labeling has only cost producers money without benefit,” said Ellis. “Continued economic analysis has shown that consumers do not use COOL information in their purchasing decisions, and despite implementation costs in excess of $1 billion for beef alone, these same reviews have found little or no economic benefit from this rule. It has resulted in discounts paid to U.S. producers like myself, and it is directly related to the closure of a number of processing plants and feedlots in the U.S.”

Ruling initially in 2011 on a complaint by Canada and Mexico, the WTO found that the U.S. COOL rule violates our international trade obligations by discriminating against livestock from our largest trading partners, adding costs and burdens to cattle solely based on their origin. Canada and Mexico are two of the top three export destinations for U.S. beef, accounting for over $2 billion in sales and nearly one-third of total U.S. beef exports.

“We support voluntary labeling efforts, efforts that give consumers the information they are looking for and reward producers all along the supply chain for meeting specifications,” said Ellis. “Programs like Born and Raised in the USA, Laura’s Lean, and Nolan Ryan’s Guaranteed Tender, that are run by the industry work; they don’t violate our trade obligations and they pay premiums back to the producer.”

Despite contentions by proponents of COOL, a recent economic study mandated in the 2012 Farm Bill and commissioned by Congress, showed that after six years of implementation, the rule had little effect on price or demand for covered commodities.

“A large part of this conversation has revolved around what consumers say they want when they are surveyed,” said Ellis. “But in my business, consumers vote with their pocketbook. At the meat counter, consumers buy beef based on price and appearance, not origin labeling. We support industry-led labeling because we know the private industry can and does do better, marketing our product with eye-appealing labels and standing behind promises with a guarantee. For all the hopes and aspirations, COOL will never be that, and that is why I can say without a doubt that it is a broken program, failed legislation, that has no place in this country.”

In early 2014, the U.S. Department of Agriculture amended the COOL rule to mandate origin on the born, raised and slaughtered locations of affected commodities. A WTO compliance panel ruled that the amended rule still violated international obligations by adding costs discriminately to foreign livestock. Earlier this week, a WTO appellate body upheld the panel’s review and recommended immediate changes to bring the rule into compliance. Following that decision, and without action by Congress, Canada and Mexico will be awarded retaliatory tariffs once damages are proven.

“Secretary Vilsack has said that the USDA is at a loss on how to fix this rule, given the statutory language, supporting what cattlemen have long maintained; there is no regulatory fix that will bring this rule into compliance with our international obligations,” said Ellis. “The only solution on the table is full repeal.”

Canada has published their list of products, by state, for possible retaliation. NCBA calls on Congress to act quickly in passing this legislation before retaliation places a chilling effect on the U.S. economy and further damages our trade relationships.