COOL repeal bill not enough to deflect trade action from Canada: Ritz

Thursday, May 21, 2015

by JIM ALGIE

Agricultural legislators in the U.S. House of Representatives have formally recommended repeal of that nation’s controversial country of origin labelling (COOL) law as it applies to beef, pork and chicken.

Meeting in full session, Wednesday, House agriculture committee members endorsed a bill to repeal the labelling law only two days after a World Trade Organization ruling against current U.S. rules. The repeal bill is to be presented for a vote of the full House of Representatives “as soon as possible,” committee chair K. Michael Conaway said in a statement posted to the committee’s website.

Canadian Agriculture Minister Gerry Ritz and a spokesman for the Canadian Pork Council both played down this week’s moves in Congress, emphasizing the need for Congressional follow-through. In a statement provided to Better Farming by the minister’s communications director, Ritz expressed approval for House of Representatives moves but emphasized his government’s current plans for trade retaliation against the United States as a result of this week’s WTO ruling.

"While introducing a bill to repeal COOL is a step in the right direction, actually passing the bill is the only way for the United States to avoid retaliation,” Ritz said in the statement. “There is broad support in the United States to repeal COOL and we call on legislators to ‎do the right thing and fix this wrong-headed policy once and for all."

In an interview, Canadian Pork Council spokesman Gary Stordy played down the details of this week’s Congressional moves.

“It only matters to us once it’s done,” Stordy said in an interview. While the agency is following with interest the U.S. legislative process it is more directly engaged with current work on measuring damage to Canadian exporters and helping to prepare data for trade retaliation measures now under development by federal trade officials, Stordy said.  

“There is a process taking place in the United States but it isn’t going to stop or interfere with the process that Canada is now undertaking,” Stordy said. Although the federal government will drive Canada’s retaliation process, farm groups are reviewing and updating current information about harm to provide input, Stordy said.

Canadian farmers and the Canadian government have challenged U.S. labelling law since it was introduced. U.S. tracking and verification procedures add costs to the sale and processing of imported livestock in the United States.

After seven years of appeals by Canada and Mexico and four separate rulings all of which have gone against the United States, a WTO compliance panel ruled, Monday, that U.S. law is contrary to international trade agreements because it discriminates unfairly against imported product. Canadian government estimates damages to the Canadian livestock industry at more than $1 billion annually because of U.S. labelling requirements.

The agriculture committee’s repeal bill passed, Wednesday, with a recorded vote of 38 to six with support from both Republican and Democratic party members. Statements from supporters of the repeal bill emphasized the bipartisan nature of its support and emphasized the need to avoid retaliation by Canada and Mexico.

As well, Senate Agriculture Committee chair Pat Roberts has urged Congressional action to avoid retaliation. However, the Senate committee has yet to consider specific measures and the committee’s ranking Democrat, Debbie Stabenow of Michigan, continues to express support for some form of labelling law.

“Consumers have a right to know where their food comes from,” Stabenow said in a statement issued after the WTO decision. “If adjustments are needed, we should find a bipartisan path that protects the interest of consumers and encourages international trade,” she said.

As well, the House committee’s ranking Democrat, Collin Peterson of Minnesota, was among the few who voted against Wednesday’s repeal bill. In a statement prepared for the meeting, Peterson described repeal of the law as “premature” and called instead for a period of arbitration.

Peterson cited examples of labelling laws in other countries, notably those of the European Union where existing rules require details of the country of origin, fattening and slaughter of food animals. Peterson predicted the Senate would reject a House proposal for repeal.

“I think it’s worth looking at to see if we can find a workable North American solution,” Peterson said.

Since publication of the WTO ruling on Monday, Canadian and Mexican officials have begun work on plans for retaliation allowed under trade agreements. In June of 2013, the Department of Finance published a list of U.S. imported products for a potential 100 per cent surtax in the event of WTO authorization. The list includes a variety of products, including cattle and pigs, beef and pork, ethyl alcohol, chocolate, orange juice and wooden office furniture.

Stordy said the U.S. labelling law has cost Canadian hog farmers dearly and provoked the collapse of some businesses focussed on U.S. buyers.

“Over the past seven years there are three million less animals going into the States,” Stordy said. Although market conditions have fluctuated enormously during that period, the impact of COOL has remained, he said.

“Producers in the weanling export market have either had contracts broken and refused or they’re out of business,” Stordy said. “Those that are exporting weanlings into the States have struggled to have regular sales. Some plants have said they’re not accepting Canadian-born pigs.”

“Producers have left the business because they’ve lost market access,” he said. “There are producers who have had price suppression because of COOL and that ultimately affects their business model,” Stordy said. BF