Can The U.S. Keep COOL?

By Sam Lewis

Back in June, the U.S. House of Representatives passed a repeal to the federal mandate requiring country-of-origin labels (COOL) on beef, pork, and chicken sold in the U.S. This winding, and ever-evolving, regulation that presents many challenges to the meat and poultry industry is now in the hands of the Senate.

Embraced by the USDA, the rule stemmed from a 2002 law aiming to increase supply chain transparency in the meat and poultry industry. The 2002 law was amended in 2013 to require multinational labels, including data on where the animal was raised and slaughtered. The American Meat Institute (AMI) responded to the USDA mandate by filing a lawsuit against the agency. AMIs argument was based on the idea that the law was unconstitutional, claiming infringement on the meat industry’s First Amendment rights to commercial free speech.

However, this argument was rejected by the U.S. Court of Appeals, supporting the legitimacy of the mandate in spite of AMI’s evidence that claimed the labels had little effect on consumer purchasing decisions. The court’s decision indicates the USDA had its reasons for the mandate — helping American shoppers choose meat products from America, aiding supply chain transparency, and increasing safety measures in the event of foodborne illness — with the goal of protecting consumers in mind.

The decision brought additional opponents of the legislation to the forefront. The bill stemmed partially due to several World Trade Organization (WTO) rulings suggesting COOL discriminates against imported meats from Canada and Mexico. Further, in 2009, Canada filed a formal dispute with the WTO regarding the USDA mandate stating COOL creates unnecessary, and unfair, costs to Canada’s livestock supply chain. The country also argues that the legislation impedes on its ability to remain competitive with U.S. meat and poultry firms as U.S. firms don’t want the additional costs of tracking and importing foreign animals.

After more than half a decade of disputes and appeals, WTO issued a ruling in May stating the mandate violates trade requirements and created unnecessary costs to meat companies. The House of Representatives voted to repeal the labeling mandate in fear of disciplinary measures that carried the potential to damage the U.S. food industry.

This leaves the mandate’s fate in the hands of the U.S. Senate. However, the case may have become more cut and dry because of a regulatory impact analysis report from the USDA.  The report concludes that the benefits created from COOL are minimal and consumers aren’t influenced to buy U.S. food products because of the country of original on the label.

Regardless of the USDA’s report, currently, the U.S. Senate appears to be split between repealing COOL completely and substituting it with a voluntary labeling program. As a result, efforts are being made to comply with WTO requirements and keep aspects of COOL. Recently, a bill was introduced to the Senate by Debbie Stabenow (D-MI) and John Hoeven (R-ND). The duo’s proposal would allow processors to voluntarily label meat products, a process currently in place with Canadian meat companies. Should the U.S. Senate pass a bill that nullifies COOL, it is expected that President Obama will veto it, saying, “No trade agreement is going to force us to change our laws.”