WASHINGTON, Dec. 9, 2015 - With U.S. exporters facing the threat of $1.01 billion in COOL-related retaliatory tariffs, the pressure is on the Senate to halt the sanctions before they are imposed.
On Monday, the World Trade Organization announced the retaliatory figures authorized to Canada ($781 million) and Mexico ($227 million) from the country-of-origin labeling dispute. After years of debate over whether mandating born, raised, and slaughtered information on labels of meat sold in U.S. grocery stores was in violation of trade obligations, WTO’s announcement was the final step in the process before imposition of the tariffs.
The decision provides an impetus for revved up discussion in the Senate, where several lawmakers apparently had been waiting to see the size of the retaliatory figure. Now, with a unanimous goal of avoiding retaliation, talks will continue about attaching a COOL fix to a piece of “must pass” legislation before the end of the year.
“We’re going to have a bipartisan solution (on COOL). We have to,” Michigan’s Debbie Stabenow, the ranking Democrat on the Senate Ag Committee, told reporters Monday. “My number-one thing has always been to stop retaliation and again, there’s a number of folks talking, and I think we’ll have something.”
Stabenow declined to divulge specifics, but said “we’re going to have a solution that is fine.”
After the House voted in June to repeal the beef, pork and poultry provisions of the law – which WTO found to be a form of protectionism -- Stabenow and North Dakota Republican John Hoeven introduced a bill in the Senate that would repeal some of the mandatory aspects of COOL and replace them with a voluntary regime. On Monday, Hoeven said that although he will continue to push for inclusion of some kind of voluntary labeling program like the one in the bill he and Stabenow authored, there’s a good chance the Senate will vote for repeal.
“Clearly, at this point with the tariffs, it’s likely that we’ll have a repeal for mandatory COOL,” he said. “We need to make sure that there’s not retaliatory tariffs, right? So then how you develop a voluntary component is something that we’re still discussing.”
Whether or not action on COOL involves a voluntary program, it will likely be attached to one of two bills expected to be addressed before the end of the year: an omnibus spending bill or a customs enforcement bill. Both are considered pieces of legislation that are likely to pass and be signed by President Barack Obama before Congress adjourns for the year, currently set for Dec. 18 – the same day as Canada and Mexico could be authorized to impose their respective tariffs.
Throughout the WTO process, Canada has been vocal in its threat of products that would face retaliation, publishing a list of about 40 items that could be targeted ranging from livestock to liquor. Canadian officials have maintained that their retaliation would be evolving, potentially changing to target industries important to different members of Congress who are not in support of full repeal. Mexico has not been as vocal, but analysts indicate the retaliation methods could be similar to Canada’s.
In a video on the Senate Ag Committee’s Facebook page Monday night, Chairman Pat Roberts, R-Kansas, said the debate is no longer about the merits of COOL, it’s about stopping the looming retaliation.
“The numbers are in, and they’re bad numbers,” Roberts said. “We have to stop this trade retaliation, and that is precisely what the ag committee is going to do and we’re going to do it as quickly as possible.”
On Tuesday, Roberts reiterated his desire to “get this thing settled” and to “do what the House did and go from there.” He told reporters he would be talking with Canadian officials later in the day and would be working with Senate leadership to decide when the issue will be addressed.
South Dakota Republican John Thune said some pro-COOL groups are actually more in favor of repeal than a watered down version that might include a compromise on the “product of the U.S. requirements” that mandate the born, raised, and slaughtered disclosures. With that in mind, Thune – one of a group of Republican Ag Committee senators in support of COOL – told reporters the Senate may be heading toward repeal.
“I’ve always thought that if we could find a compromise, we should, but I don’t know if that’s possible,” Thune said. “Something’s gotta be done now that we know that the billion dollar number is out there.”
Agriculture Secretary Tom Vilsack told Agri-Pulse contributor Jeff Nalley that it is “obvious that Congress has to act” to prevent retaliation, but he would prefer COOL reform over repeal. He said complete repeal would be “a mistake because there’s some aspects of COOL that people do favor” and that Congress should “focus and target the changes” to avoid retaliation “and perhaps preserve the opportunity for a voluntary label.”
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