WASHINGTON, July 29, 2015 – A dispute in the Senate over what lies ahead for U.S. country-of-origin labeling (COOL) likely won’t be resolved anytime soon. With Senate Agriculture Committee leaders deeply divided, an earlier attempt to tie the language to a highway bill appears to be a futile exercise.

Authorization for federal highway funding is set to run out Friday, but the House and Senate agreed to yet another short-term extension, this time to Oct. 29. That means the House will write a long-term bill this fall to match the one the Senate is debating this week. The House GOP leadership had wanted to put off the long-term bill until the end of the year, but Senate Republicans have been pushing for earlier action. If history is any guide, it could still be December before a long-term bill is ready.

Meanwhile, Senate GOP Conference Chairman John Thune says the COOL issue is likely being punted to September. Thune, R-S.D. supports turning COOL into a voluntary program, and says that could be attached to a trade enforcement measure that the House and Senate are currently negotiating. Still, the path forward is far from certain.

The House last month voted overwhelmingly to repeal the meat labeling law, but Senate Agriculture Chairman Pat Roberts has run into strong, bipartisan resistance to the idea of full repeal.

Shortly before Roberts took to the Senate floor last Thursday to speak for his amendment, a bipartisan group of Ag Committee senators held a press conference to discuss their plan to repeal the some of the mandatory aspects of COOL and replace them with a voluntary program. That legislation now has the support of five Republicans -- Mike Enzi of Wyoming, Chuck Grassley of Iowa, John Hoeven of North Dakota and Mike Rounds and John Thune, both of South Dakota. These five presumptive votes against clean repeal leave Roberts with a nearly impossible task of pulling support from at least 11 Democrats in order to achieve a 60-vote threshold to stop debate and advance the bill.

Based on those numbers, and specifically the five Republicans in favor of the voluntary program bill proposed by Hoeven and Ag Committee ranking member Debbie Stabenow, D-Mich., Grassley told reporters Tuesday that he thinks “we’re in a strong position in the Senate for the voluntary labeling,” adding that he thinks “most Democrats support it.”

However, Grassley also said he would vote for repeal if some form of WTO-complaint compromise can’t be achieved. And the longer the Senate delays, concerns over potential trade retaliation will continue to grow – potentially providing more Democratic support for Roberts’ efforts to fully repeal COOL.

While those supportive of Hoeven and Stabenow’s bill say it is compliant with WTO rules because of its voluntary nature, the Canadian government – which has its own voluntary COOL program – disagrees, saying the contentious “product of the U.S.” definition and requirement of born, raised, and slaughtered information, voluntary or otherwise, will still require segregation of live animals.

In a joint statement, Gerry Ritz, Canadian agriculture minister, and Ed Fast, the country’s trade minister, said the proposal from Hoeven and Stabenow is insufficient to stop retaliatory tariffs, once approved by the WTO.

"Senator Stabenow's COOL 2.0 fails to address Canada's concerns and would continue to undermine our integrated North American supply chains,” Ritz and Fast said. “By continuing the segregation of and discrimination against Canadian cattle and hogs, Senator Stabenow's measure will harm farmers, ranchers, packers, retailers and consumers on both sides of the border.

"The only acceptable outcome remains for the United States to repeal COOL or face $3 billion in annual retaliation.”

Grassley said that reaction from the Canadian government is “intellectually dishonest. When we do exactly what they’re doing, why wouldn’t that satisfy them?” he told Agri-Pulse.  

Stabenow made a similar point on the Senate floor yesterday, saying she thought her bill would be “a no-brainer.” She went as far as to display quotes from Canadian and Mexican officials encouraging the U.S. to switch to a voluntary program, including one from Ritz saying under a voluntary label, “which we do in Canada under product of Canada, you don’t have that trade-sanctioned problem.”

But as Nick Giordano, vice president and counsel for global government affairs with the National Pork Producers Council, put it, the U.S.’ day in court is over, and the trial has moved to the sentencing phase…the WTO is highly unlikely to review the underlying law involved in the dispute, leaving decisions to the government of Canada and Mexico.

“There’s no more [WTO] reviews of legislation, and I think somewhere, something has gotten lost in translation in the United States where perhaps some senators are under the misimpression that the WTO is going to again review whatever the U.S. Congress does,” Giordano told Agri-Pulse, adding that some of that confusion might also exist in the office of the U.S. Trade Representative (USTR). “That’s not the case, and I’ll tell you unequivocally it’s not the case.”

He said if the WTO were to decide to review any potential changes to the existing U.S. COOL law such as shifting to a voluntary program, it would be “a significant and virtually unprecedented departure” from normal WTO practices.

“The unfortunate reality is because we’ve lost repeatedly, our day in court is over, and Canada and Mexico hold all the cards,” Giordano said. “I don’t like that, but that’s the reality, and unless they say they are not going to retaliate and they are good with what the Congress does, we are going to be in a world of hurt.”

A WTO arbitration decision is expected by November, which would then give Canada and Mexico authorization to retaliate. Giordano and other industry insiders expect retaliation to come from both countries as soon as the WTO decision is announced. 


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