10 COOL Things the House Agriculture Committee Got Wrong

10 COOL Things the House Agriculture Committee Got Wrong

Billings, Mont. – Just days before the World Trade Organization (WTO) issued its fourth ruling against the U.S. country of origin labeling (COOL) law, the U.S. House Agriculture Committee (Committee) issued a news release titled, "10 COOL Things to Know."

According to R-CALF USA, the Committee’s news release is an unprecedented propaganda piece that attempts to rehash anti-COOL arguments that were rejected by the U.S. Court of Appeals during the meatpacker lobby’s failed attempt to repeal COOL through litigation.

Below, R-CALF USA’s CEO Bill Bullard restates the House Agriculture Committee’s 10 COOL "things" asserted in the Committee’s official government news release and he provides a factual rebuttal to each.

1. ‘COOL is not about food safety or traceability.’

"Yes it is according to the U.S. Court of Appeals that researched the Congressional Record and found that food safety interests were among the reasons Congress passed COOL. The court determined that an agency’s belief that COOL does not serve food safety purpose ‘doesn’t delegitimize a congressional decision to empower consumers to take possible country-specific differences in safety practices into account. Nor does such an agency belief undercut the economy-wide benefits of confining the market impact of a disease outbreak.’"

2. ‘COOL is costly for producers, retailers, and consumers.’

"Current COOL regulations were implemented two years ago, in May 2013. Since then, U.S. cow/calf producers, backgrounders and feeders have received the highest nominal prices in the history of their industry and their share of the consumers’ beef dollar has jumped to 55%, which is a 20-year high. This means COOL helped producers recover their lost market share that packers and retailers captured from them prior to COOL. Also, consumer demand measured by Kansas State University (KSU) increased nearly 12 points since COOL’s implementation, indicating that consumers are more than willing to pay for COOL even while extremely tight cattle supplies are driving beef prices higher. The cost of COOL is estimated to be less than half of one penny per pound based even on the Committee’s asserted $211.9 million price tag."

3. ‘There is no increase in consumer demand for origin labeling information as a result of COOL.’

"While theorists make this claim, actual market data demonstrate they are wrong. As stated above, beef demand increased nearly 12 points since implementation of the May 2013 regulations. If measured since COOL’s initial implementation in March 2009, beef demand increased by about 13 points. Prior to COOL, from 2004-2009, beef demand fell drastically by about 18 points. So, market data show that COOL helped domestic beef demand recover from its downward spiral even while consumers were paying supply-induced, record prices for beef."

4. ‘Consumers interested in country of origin information are not willing to pay more for it.’

"Yes they are. A 2010 U.S. Department of Agriculture (USDA) investigation found that, ‘Packers were not able to sell beef with ‘Canada’ or ‘Mexico’ labels for the same price as beef produced entirely within the United States.’ A 2014 Oklahoma State University survey found that, ‘Results indicate consumers valued beef that was born or born and raised in Canada $0.89 and $1.05 less, respectively, than beef that was born, raised, and slaughtered in the U.S.’ Also, the U.S. Court of Appeals referenced a survey that found that 71-73 percent of consumers would be willing to pay for country-of-origin information about their food."

5. ‘The World Trade Organization (WTO) has ruled against the U.S. (four) times.’

"This is true. But, it was expected given the conflicts of interest that predispose the WTO to faulting COOL. First, the WTO advocates against country-specific labels and for its own ‘Made in the World’ labeling initiative, which it calls, ‘A Paradigm Shift to Analyzing Trade.’ Our U.S. justice system would never allow a global advocate of alternative labeling to decide a dispute involving country-specific labels. But the WTO did. Second, Ricardo Ramírez-Hernández presided as an appellate jurist in both of the U.S. COOL appeals before the WTO. Mr. Ramírez-Hernández is a Mexican national who represented Mexico in international trade litigation and he served as lead counsel to the Mexican government in several WTO disputes. Due process dictates that a representative of a party to a dispute cannot serve as a judge over the dispute. Our U.S. judicial system would never tolerate this. Yet, the WTO condones this conflict of interest."

6. ‘Canada and Mexico are expected to retaliate should the WTO rule against the U.S. in the coming days.’

"The WTO ruling does not assert that COOL caused Canada or Mexico to suffer any specific monetary damage. In past WTO cases, retaliatory measures were only authorized after a proceeding to determine what specific monetary damages, if any, were suffered. Such a proceeding has not yet been scheduled for COOL. This means the WTO dispute process is not over, and the WTO is not expected to make a damage determination for several months. The WTO, therefore, has not authorized Canada or Mexico to retaliate during this early phase of the dispute."

7. ‘Retaliation could hurt much more than just the agriculture industry.’

"This is a speculative, sky-is-falling argument. The degree that retaliatory measures might harm other U.S. industries cannot be estimated until and unless Canada and Mexico actually prove their claimed monetary damages during a yet-to-be-held WTO proceeding. It will likely be difficult for Canada and Mexico to prove any substantive damages given the recent study by Auburn University Economist C. Robert Taylor that concluded that most or all of the financial harms attributed to COOL were actually caused by the global recession and by the cattle procurement practices of multinational meatpackers, not by COOL. Also, livestock imports from Canada and Mexico have been increasing post-COOL, indicating that those countries’ access to the U.S. market has not been impaired by COOL."

8. ‘U.S. trade relationships could be damaged as a result of COOL.’

"The U.S. is the most important market for Canadian and Mexican products. Canada, for example, relies on the U.S. to purchase a whopping 77% of Canada’s annual exports. Census Bureau data for 2014 show the U.S. imported $640 billion in products from Canada and Mexico but exported to them only $552 billion, leaving the U.S. with a trade deficit of $88 billion. The same relationship exists in the trade of cattle, beef, beef variety meat and processed beef. In 2014 the U.S. imported $4.5 billion in those products from Canada and Mexico while exporting to them only $2.2 billion, leaving the U.S. with a $2.3 billion trade deficit. It would be illogical for Canada or Mexico to initiate actions that would cause a serious strain on their trading relationship with the United States because doing so could disrupt their extremely profitable trade surpluses."

9. ‘Congress must be prepared to act quickly.’

"Congress should not take any action right now. Congress has subjected the U.S. to this international tribunal’s procedures that do not conform to U.S. judicial standards. It would be irresponsible for Congress to prematurely bail-out before the U.S. has even completed every phase of the dispute settlement process. Capitulating to Canada and Mexico at this early juncture would constitute an unprecedented surrender of the United States’ right to pursue all available options before deciding to cede any of its sovereignty – in this case its constitutional right to inform consumers as to the origins of their food. Rather than to act quickly, Congress should begin consultations with the Administration to determine whether the U.S. should attempt to bring COOL into compliance with the ruling, initiate negotiations with Canada and Mexico to arrive at a ‘mutually-acceptable compensation,’ or proceed to challenge any monetary claims that Canada and Mexico may formally bring to the WTO. According to WTO rules, a meeting will be scheduled for the purpose of learning what actions the U.S. intends to take within 30 days after the WTO formally decides to either adopt or reject the latest COOL ruling. This formal adoption or rejection has not yet occurred so even this preliminary timeline has not yet been triggered."

10. ‘More than 100 American and international businesses and organizations do not support COOL.’

"It may be true that there are more than 100 international businesses and organizations that oppose COOL. However, 207 consumer, farm, ranch, rural, manufacturing and community groups recently sent a letter to Congress expressing their strong support for COOL. In addition, a 2014 Consumer Reports survey found that 90% of consumers support COOL."

# # #

R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is the largest producer-only cattle trade association in the United States. It is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. For more information, visit www.r-calfusa.com or, call 406-252-2516.