COOL completion renews compliance concerns

May 24, 2013

USDA last Thursday issued a final rule to modify the labeling provisions for muscle cut meats covered under the Country of Origin Labeling (COOL) rule based on complaints from Canada and Mexico. The World Trade Organization (WTO) ruled in favor of Canada and Mexico and put the deadline of May 23 for U.S. compliance.

Despite the new labeling plan, Mexico and Canada are skeptical of the U.S.’ plan.

According to the Canadian Cattlemen’s Association (CCA), the provisions are far from compliant with WTO’s orders.

“The question is, will [the U.S.] be maintaining the current status quo level of non-compliance or will they make it worse by implementing U.S. Department of Agriculture (USDA) proposed regulatory amendment? The regulatory proposal moved a step closer to implementation on May 10 when USDA submitted it again to the White House Office of Management and Budget for approval to publish as a final rule. We note that the proposal is now designated as ‘economically significant’ meaning that the USDA now acknowledges the cost of this proposal will affect over $100 million of commerce. Such a designation should mean that the rule is subject to a more rigorous inter-agency review process and that there must be a mandatory 60 day delay following final publication before the rule can come into force,” CCA wrote in their weekly news update just prior to the compliance deadline.

“We will see whether US- DA finds a way around these additional requirements or if the earliest the rule could come into force is late July. If the latter, then the U.S. would have no counter-argument to an assertion by Canada at the WTO that the U.S. has failed to comply by the deadline and Canada would be able to immediately request compensation or authority to retaliate,” it continued.

CCA believes that any chance for the Farm Bill to contain any COOL measures would be if there were retaliatory tariffs on U.S. exports by Canada and Mexico.

Trade Minister Ed Fast and Agriculture and Agri- Food Canada Minister Gerry Ritz were working toward having the Government of Canada publish a list of U.S. products that would be potential targets.

Ritz told reporters in a news conference that the list would be put into effect if Washington failed to comply with WTO’s mandate. The Canadian government said it would also toughen testing for food safety rules for meat plants.

The Safe Food for Canadians Action Plan will firstly tighten the Canadian Food Inspection Agency’s beef safety rules and has implemented new mandatory requirements that will strengthen controls for E. coli O157:H7.

Also, by July 2, federallyregistered plants in Canada that produce mechanically tenderized beef cuts will be required to label those products as tenderized and in clude cooking instructions.

Canada estimates $1 billion per year in lost trade from the regulations. They successfully challenged the rule at the WTO’s dispute settlement body in 2011, a decision upheld last year by an appellate body.

National Cattlemen’s Beef Association President Scott George, a Cody, WY, dairy and cattle producer, shared concerns over the final COOL document.

“We are deeply disappointed with this shortsighted action by the USDA. Our largest trading partners have already said that these provisions will not bring the United States into compliance with our WTO obligations and will result in increased discrimination against imported products and in turn retaliatory tariffs or other authorized trade sanctions. As we said in comments submitted to USDA, ‘any retaliation against U.S. beef would be devastating for our producers.’ While trying to make an untenable mandate fit with our international trade obligations, USDA chose to set up U.S. cattle producers for financial losses. Moreover, this rule will place a greater recordkeeping burden on producers, feeders and processors through the born, raised and harvested label.

“As cattlemen and women, we do not oppose voluntary labeling as a marketing tool to distinguish product and add value. However, USDA is not the entity that we want marketing beef, and on its face, a label that says ‘harvested’ is unappealing to both consumers and cattle producers.”

In a previous statement, George pointed out the flaws in the document and an alternate plan.

“We have long advocated that M-COOL is a marketing tool and while cattlemen and women are proud of the products they produce, a mandatory labeling program does not provide a value to our industry or our customers,” said George. “We support and see value in voluntary labeling programs like Certified Angus Beef, where there is a genuine effort to distinguish and market the product. The proposed rule will not meet those ends.”

Despite those supporting voluntary labeling, support of COOL remains strong, and appears to include US- DA. After the rule was challenged through WTO, US- DA changed the requirements, to what some considered stricter provisions.

Under the rule, all products sold at retail will be labeled with information noting the birth, raising and slaughter. This requirement will place greater record-keeping burdens on producers, processors and retailers, according to George.

Further, the rule would eliminate the ability to commingle muscle cuts from different origin, which will add to the costs of processing non-U.S. born, raised and slaughtered products, resulting in further hesitance to process product that was imported at any stage of development.

“These provisions only serve to give our trading partners a stronger case at the WTO,” said George. “The Canadian government has already confirmed that they will consider all options including extensive retaliatory measures. Our industry, battered by drought and high feed costs, and over-regulation cannot afford additional burdens from the federal government. The USDA should spend its time and money working to avoid another threat of sequester of federal meat inspectors, not drafting new rules to fix an old problem.”

But support still remains for the controversial COOL.

National Farmers Union (NFU) President Roger Johnson issued a statement following the decision: “We are very pleased that the USDA has decided to stand strong and keep COOL. The decision to bring the law into compliance with the WTO’s ruling is a win-win situation for all interested parties.

“We further applaud the administration for deciding to take a proactive approach in bringing COOL into compliance by providing more information on the origins of our food, instead of simply watering down the process.

According to NFU, legal analysis has found that this will satisfy WTO’s requirements and meets the compliance deadline of May 23, 2013.

COOL support

According to the Consumer Federation of America, a recent survey they conducted found that a large majority of Americans continue to strongly support mandatory country of origin labeling.

Ninety percent of a representative sample of 1,000 adult Americans favored, either strongly or somewhat, requiring food sellers to indicate on the package label the country of origin of fresh meat they sell, according to the study. Additionally, 87 percent of adults favored, either strongly or somewhat, requiring food sellers to indicate on the package label the country or countries in which animals were born, raised and processed. The poll also found that 90 percent of adults favored, either strongly or somewhat, requiring food sellers to indicate on the package label the country or countries in which animals were born and raised and the fact that the meat was processed in the U.S.

“The survey results are a further indication of what we have known for some time: Consumers overwhelmingly want to know more about the origins of their food, and farmers and ranchers want to provide this information,” said Johnson. “These findings, coupled with the recent withdrawal of two shortsighted amendments to the Senate and House’s respective farm bills that would have negatively impacted Country-of-Origin Labeling, are promising indications that country-of-origin labeling is vitally important and here to stay.”

The telephone survey was undertaken by ORC International May 9 to 12, 2013, using a split sample of landlines and cell phones. The margin of error is plus or minus three percentage points, according to ORC. — Traci Eatherton, WLJ Editor