The Senate Agriculture Committee held a hearing Thursday to discuss country-of-origin labeling (COOL) for meat, which requires that packages sold in the U.S. indicate the country, or countries, where animals were born, raised and slaughtered.
“It doesn’t matter if you’re pro-COOL (and many are) or anti-COOL (and many are), you cannot ignore the fact that retaliation is imminent and we must avoid it,” Chairman Pat Roberts (R-KS) said in his opening statement.
He was referring to the tariffs Canada and Mexico plan to place on U.S. goods after winning the final case before the World Trade Organization that the program is an unfair barrier to trade.
Two weeks ago, the House of Representatives passed a bill to repeal COOL for beef, pork and chicken, and eyes are now trained on the Senate.
In her opening statement on Thursday, Ranking Member Debbie Stabenow (D-MI) added that “inaction from the Senate is not an option.”
Five of the six witnesses appearing before the committee adamantly supported an immediate repeal of COOL, arguing that the $3.2 billion in potential retaliatory tariffs sought by Canada and Mexico would significantly harm the U.S. economy.
“The Senate must act prior to the WTO’s authorization of retaliation,” Roberts said.
“Retaliation is imminent and inevitable unless and until the U.S. takes action to repeal the underlying COOL statute,” wrote Mexican Secretary of the Economy Ildefonso Guajardo Villarreal in a letter this week to members of the committee, which Roberts read.
He also quoted a letter from Canadian Minister of Agriculture Gerry Ritz that indicated Canada’s plan to retaliate unless the Senate votes to repeal COOL.
James Trezise, president of the New York Wine & Grape Foundation, told the committee that “unless this issue is resolved before the August recess, those tariffs could take effect in September.”
Canada is a “key market” for New York wine and for wine from across the country, he added.
“The potential tariff increase by the Canadian government would roughly double the price of American wines to Canadian consumers overnight, drying up our sales and opening the door to competing wine regions from throughout the world,” Trezise said.
Other witnesses, including Barry Carpenter, CEO of the North American Meat Institute, and Jaret Moyer, president of the Kansas Livestock Association, testified that COOL is costly and burdensome to meat producers, and that there is little evidence showing that consumers actually use the label.
However, Leo McDonnell, executive officer and director emeritus of the United States Cattlemen’s Association, countered that “efforts to strip this program through a blanket repeal approach is unwarranted and unprecedented at this point of the process in arbitration.”
He echoed lawmakers on the House floor who said that no retaliatory tariffs will be quickly inflicted because arbitration is going to take months.
But, Trezise said, foreign buyers are making decisions now, and there’s a lot of uncertainty about whether American wines will continue to sell if the prospect of increased prices is looming.
“If there looks to be some more delay in terms of resolving this issue instead of repealing it, then the importers are going to stop making orders for American wine,” he said.
On Wednesday, Stabenow offered a draft bill for the committee’s discussion that would make COOL voluntary for beef and pork.
When asked whether they would support voluntary labeling, the witnesses at Thursday’s hearing mostly agreed.
Trezise and Chris Cuddy of Archer Daniels Midland Company said they would not object as long as the voluntary label was WTO-compliant. McDonnell expressed support for the voluntary label as long as its integrity is maintained.
Craig Hill, president of the Iowa Farm Bureau Federation, said that there could be a conversation about a voluntary label, but only after the mandatory rule is fully repealed.
“We really must avoid any kind of retaliation for even one day,” Trezise said.
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