Canadian official 'happy' with COOL omnibus language, but retaliation still possible

By Spencer Chase

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, Dec. 16, 2015 - Language included in the omnibus spending bill to repeal parts of the U.S. country-of-origin labeling is sitting well with foreign stakeholders, but that doesn't mean they won't continue efforts to retaliate against the provision.

The bill would repeal COOL requirements for beef and pork muscle cuts as well as ground product, pulling the contentious “born, raised, and slaughtered” language targeted in a World Trade Organization (WTO) dispute from U.S. law. The new language doesn't go as far as a repeal bill passed by the House in June - which also included poultry products - but it goes further than alternative language proposed by some in the Senate.

Together we can feed the Bees"

The omnibus rider comes after years of debate at the WTO that eventually led to the conclusion that the U.S. COOL law requiring born, raised, and slaughtered information on some U.S. meat labels accorded unfavorable treatment to Canadian and Mexican livestock. Earlier this month, the WTO announced Canada and Mexico could retaliate against the U.S. for the COOL law to the tune of over $1 billion in retaliatory tariffs, a move that could be authorized as early as Friday.

On a call with reporters Wednesday afternoon, Canadian ag and trade officials expressed optimism that the new language could spell the end of the multi-year trade dispute. Chrystia Freeland, Canada's international trade minister, said Canada was “happy with the language” based on conversations with experts and stakeholders. Lawrence MacAulay, the country's agriculture minister, said he was “cautiously optimistic this will lead to a resolution,” but gave no indication Canada would be taking its foot off the retaliatory gas pedal until the repeal language has President Obama's signature, which could happen as early as Friday.

“The bottom line is it must be repealed or we will retaliate,” MacAulay said. “We hope that this bill will go through,” he said.

Freeland said Canada and Mexico were expecting to receive retaliatory authorization on Friday, but that authorization could slip to Monday due to some “technical reasons” having to deal with the WTO's workload. She and MacAulay both declined to discuss any hypothetical scenario where Canada and Mexico receive WTO authorization to retaliate before the language in the omnibus bill is approved, saying repeatedly that their primary goal is COOL repeal.

“When the legislation is evaluated totally and it repeals COOL, then we will be in a position to remove the retaliation,” MacAulay said. “But not until it has satisfactorily removed COOL from pork and beef in this country.”

In an interview with Agri-Pulse, John Masswohl, director of government and international relations with the Canadian Cattlemen's Association, encouraged Congress to pass the spending bill “with (the COOL) language intact,” saying it should be able to hold off retaliation.  He said no one, including the Canadian and Mexican governments, wants to see retaliation put in place.

“It's the lose-lose scenario,” he said. “In any negotiation, you try to come up with the win-win . . . Let's hope we don't have to go there.”

Senate Agriculture Committee Chair Pat Roberts, R-Kan., told reporters on Tuesday that he thinks Canadian and Mexican officials might hold off on immediate retaliatory action due to congressional efforts to repeal the law.

“They know that we are trying to do our best,” Roberts said. “They'll give us some time to get this done since they know that this effort is being made.”

Industry reaction to the news has been mostly positive, with many groups pleased with the prospect of avoiding retaliation. Linda Dempsey, vice president of international economic affairs with the National Association of Manufacturers, said the repeal of COOL and the elimination of potential tariffs will help “to ensure a level playing field.

“Repeal of these COOL provisions is the only solution remaining that will protect U.S. manufacturing jobs, and we are relieved that this spending deal includes this essential provision,” Dempsey said in a statement. “Manufacturers need to see Congressional action quickly to prevent Canadian and Mexican retaliation from being imposed later this month.”

Mike Brown, president of the National Chicken Council, said NCC was “pleased that Congress is poised to repeal” the mandatory COOL requirements and work to halt retaliation.

“The retaliatory tariffs awarded by the WTO to Mexico and Canada totaling over $1 billion should now not be levied against any of our chicken and fowl products, or any other American goods,” Brown said. “This is a victory for all U.S. agricultural products and a win-win for U.S. chicken producers and consumers.”

National Farmers Union President Roger Johnson was much less supportive of the language, calling it “legislative hocus pocus.”

“Clearly this language was produced by long-time COOL opponents who legislated in the dark of the night under the guise of solving an issue, when really their intentions completely undermine the will of American consumers and producers,” said Johnson. “NFU is furious that yet again the dysfunction of Congress has enabled this to happen.”

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Despite NFU's objections, Michigan Democrat Debbie Stabenow, the ranking member of the Senate Agriculture Committee and a vocal COOL supporter throughout the WTO process, said in a statement that she was happy to see potential retaliation avoided through the omnibus.

“It is critical that we come together to resolve this issue so that our businesses do not face the cost of retaliation,” she said. “I'm pleased we've done that on a bipartisan basis.”

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