A key question for livestock producers is, what has been happening behind the scenes on the mCOOL issue while Congress has been on recess?
The answer is, progress is hard to detect.
As you may know, the House passed a repeal bill shortly after the World Trade Organization (WTO) made its fourth and final decision that the U.S. mandatory country-of-origin-labeling (mCOOL) law did not meet WTO rules. Because the United States has failed to adequately revise or repeal its regulations to meet the rules and lost all appeals, that means the winners in the case — Canada and Mexico — have the power to decide what constitutes settlement of the case or to request permission to retaliate against imports of U.S. products into their countries.
Canada and Mexico have said plainly that repeal of the law is what they would accept. They filed retaliation figures — based on damages they have suffered — totaling $3 billion for Canada and roughly $600 billion for Mexico.
While we’re guessing this whole dispute would have been resolved years ago if the United States Trade Representative (USTR) had been in charge instead of USDA, the USTR is not helping things now. USTR issued a report claiming the damages were only $91 million, a figure so ridiculously low that this dispute would never have risen above pimple status if it were valid.
Meanwhile, Sen. Debbie Stabenow (D-Mich.) and a group of both Democratic and Republican senators have ridden onto the scene very late in the game and proposed a very lame “solution” that amounts to the federal government setting the rules on a “voluntary” labeling program for U.S. beef and pork.
There are all kinds of problems here. There has never been any reason the beef production chain couldn’t have voluntarily put a USA label on beef, as long as they could back up the claim. They just couldn’t put it on the USDA weight and grade label because it had nothing to do with pricing, and the inspection stamp and label is a separate issue. The big packers never did it on their own because consumers didn’t want it enough to pay for the cost of segregating production.
Now some rancher groups are complaining they don’t have a program to take advantage of a USA label if mCOOL goes away. There have been source- and age-verified programs they could participate in, but I’m not sure how many of those put a USA label on it. But they are upset it wouldn’t be a government program. Now they say a government program would force the packers to segregate cattle in the processing segment even to make a voluntary program possible. Isn’t that interesting, since their previous position was segregation is just a strawman objection the packers had made up out of thin air because they didn’t want a mCOOL program.
Behind the scenes, R-CALF and National Farmers Union (NFU) have fallen out because R-CALF wants to hold to the original mCOOL program and NFU is favoring Stabenow’s “compromise” voluntary bill.
The USTR has also muddied the waters by saying the voluntary program Stabenow is proposing in her bill might satisfy the technical rules of the WTO. They say it might because there is much disagreement among international law professors and experts as to whether a voluntary program is really voluntary if a government body sets the standards that need to be met.
Regardless, Canada and Mexico hold the whip hand because everyone knows the rules when they join and operate under the WTO. The United States has defiantly refused to follow the rules, even when repeatedly warned by successive rulings, and has provoked our biggest trade partners.
The WTO committee that resolves the retaliation dollar figures met in mid-September. Meanwhile, Stabenow and her compadres are holding out. While her known group is too small to defeat Sen. Pat Roberts (R-Kan.) repeal amendment, there is some doubt that Roberts has the votes to pass his amendment and get it sent to the president’s desk before retaliation.
Dittmer, a veteran in agricultural policy, writes for the Agribusiness Freedom Foundation. His blog is called “Free Market Carnivore.”