WASHINGTON, Sept. 23, 2013- Meat industry trade groups opposed to the USDA Country-of-Origin Labeling (COOL) rule requested the federal government delay enforcement of the rule until the World Trade Organization (WTO) reaches a decision about its compliance.
After years of WTO challenges, USDA published a final reformed COOL rule this May, as well as began an education and outreach program for the industry. USDA’s Agricultural Marketing Service (AMS) is delaying strict enforcement of the final COOL rule while it conducts a six-month industry outreach program.
The letter sent to Agriculture Secretary Tom Vilsack and USTR Ambassador Mike Froman today noted that since publication of the new rule on May 23, the meat industry and retailers have provided country of origin information consistent with the initial 2009 rule.
American Association of Meat Processors, American Meat Institute, National Cattlemen’s Beef Association, National Grocers Association, National Pork Producers Council, North American Meat Association and Southwest Meat Association asked the USDA and U.S. Trade Representative to extend the industry outreach and education until after a WTO compliance panel makes a decision about the rule.
Most recently in the COOL controversy, Mexico requested the establishment of a compliance panel to determine if USDA’s final COOL rule issued this year complies with WTO findings. According to a Congressional Research Service (CRS) report issued this month, once the compliance panel is formed, a panel report could be released within 90 days.
“It is likely that the resolution of the WTO dispute will result in AMS being forced to develop yet another COOL Rule in an attempt to meet the United States’ WTO treaty obligations or seek amendments to the underlying statute,” according to the groups’ letter.
“Staying enforcement until the WTO dispute is resolved will reduce the uncertainty that the entire meat supply chain faces in complying with a regulation that likely will be deemed noncompliant with the United States’ WTO obligations,” the letter states.
As well as undergoing World Trade Organization review, the final COOL rule also faces court challenges from the trade groups opposed to its implementation.
Although these trade groups oppose COOL as too costly for the industry and Canada and Mexico view the requirement as trade-distorting, other cattle and consumer groups, including the U.S. Cattlemen’s Association, maintain that Americans want to know the origin of their foods.
National Farmers Union’s Vice President of Government Relations Chandler Goule noted that the six-month implementation period for the industry that began in May is already half over.
“Companies that are not taking steps to bring themselves into compliance are ignoring the clear direction of the May revisions to the regulations,” Goule said. “NFU does not believe that any further delay is appropriate or warranted.”
“We have waited too long for meaningful country of origin labeling standards,” he added. “USDA should enforce the regulations as originally noticed."
Read the trade groups’ request to delay COOL implementation below:
September 23, 2013
Honorable Tom Vilsack
Secretary of Agriculture
U.S. Department of Agriculture
1400 Independence Avenue SW
Washington, DC 20250-3700
Ambassador Michael Froman
Office of the United States Trade Representative
600 17th Street NW
Washington, DC 20508
Dear Secretary Vilsack and Ambassador Froman:
It is with great urgency that the undersigned organizations write to request that the United States Department of Agriculture (USDA) delay enforcement and extend the education and outreach program attendant to the Agricultural Marketing Service’s (AMS) final rule, Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts (the Rule). 78 Fed. Reg. 31367 (May 24, 2013). Specifically, we request that enforcement of the Rule be delayed until the World Trade Organization (WTO) reaches a final resolution on the Canadian and Mexican government’s pending complaint before the WTO regarding the Rule.
Several of the undersigned organizations’ members produce more than 99 percent of the meat products processed in the United States and the National Cattlemen’s’ Beef Association and the National Pork Producers Council are the two largest livestock producer organizations in the U.S. In addition, the National Grocers Association represents thousands of independent retail and wholesale grocers throughout the U.S. As such, the members of these collective organizations have a substantial and vested interest in the Rule’s application and enforcement.
As the enforcement deadline for the Rule approaches, many companies and livestock producers face the expensive and arduous task of re-tooling their operations to comply with the new labeling requirements. Significantly, the Rule effectively bans the practice of commingling livestock and the muscle cuts of meat derived therefrom with different origin categorizations. Prior to May 23, 2013, commingling was an accepted and important industry practice. Members of the undersigned organizations, especially those located closer to the northern and southern borders, will face substantial economic hardships if required to implement the changes necessary to comply with the new labeling requirements.
AMS’s country of origin regulations are no stranger to WTO scrutiny. The 2009 Rule, which was far less discriminatory against Canadian and Mexican livestock than the 2013 iteration, suffered two defeats before the WTO. It was deemed a technical trade barrier that discriminated against livestock from two of the U.S.’s most important agricultural trading partners, Canada and Mexico, and AMS was forced to re-write part of that 2009 Rule. The Canadian and Mexican governments are now challenging the 2013 Rule before the Dispute Settlement Body of the World Trade Organization. If the Canadian and Mexican WTO challenge is successful, then USDA will be faced with the choice of re-formulating another country of origin regulation, seeking amendments to the underlying statute, or subjecting U.S. industries to substantial retaliatory tariffs.
The undersigned, along with most WTO experts, believe that the Rule is vulnerable to this WTO challenge. It is likely that the resolution of the WTO dispute will result in AMS being forced to develop yet another COOL Rule in an attempt to meet the United States’ WTO treaty obligations or seek amendments to the underlying statute. Such a result would mean that the entire meat supply chain will be in the same position in just a few years – devoting time and financial resources to bring themselves into compliance with another COOL Rule.
Given the uncertain fate of the Rule, the undersigned request that AMS delay enforcement of the new labeling regulation pending the outcome of the present WTO challenge. Staying enforcement until the WTO dispute is resolved will reduce the uncertainty that the entire meat supply chain faces in complying with a regulation that likely will be deemed noncompliant with the United States’ WTO obligations. Such a delay will also eliminate imposing the tens if not hundreds of millions of dollars in costs that AMS calculated would be incurred by the supply chain to comply with a rule that may eventually be scrapped in a relatively short timeframe. Moreover, such a delay will not adversely affect any other interested parties. Since May 23 the meat industry and retailers have continued to provide country of origin information consistent with the 2009 rule promulgated by AMS and that process will continue.
For the foregoing reasons, the undersigned request that AMS delay enforcement of the Rule by extending the education and outreach period pending the resolution of the WTO dispute. Such a delay will benefit all sectors of the meat supply chain, as well as the consumer, who ultimately will bear the cost of the Rule if implemented. In short, the requested delay will reduce uncertainty, reduce incurring unnecessary compliance costs, protect vulnerable small businesses, and prevent unnecessary costs from being passed onto the consumer.
American Association of Meat Processors
American Meat Institute
National Cattlemen’s Beef Association
National Grocers Association
National Pork Producers Council
North American Meat Association
Southwest Meat Association
CC: Ed Avalos
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