NOBULL: USDA issues final COOL rule; industry blasts decision…with checkoff dollars

USDA issues final COOL rule; industry blasts decision

By Michael Fielding on 5/23/2013

Two of the industry’s largest groups decried a USDA decision Thursday to issue a final rule to its Country of Origin Labeling (COOL) provisions for muscle cut meats to address the latest World Trade Organization (WTO) ruling.

The final rule modifies the labeling provisions for muscle cut covered commodities to require the origin designations to include information about where each of the production steps – that is: where a meat animal was born, raised and slaughtered – occurred and removes the allowance for commingling of muscle cuts.

The final rule went into effect Thursday, and the notice will be published in the May 24 Federal Register.

Industry groups criticized the move, saying that the final rule was approved despite what the American Meat Institute described as an “outpouring of concern” from affected companies.

“This rubber stamping of the proposal begs the question of the integrity of the process: many people spoke, but no one at USDA listened,” AMI Senior Vice President of Regulatory Affairs and General Counsel Mark Dopp said in a statement. “The decision to proceed with a rule that is more costly, complex and burdensome than the earlier version, when WTO and our trading partners have sent strong signals that this is no ‘fix,’ shows a reckless disregard for trade relations and for companies whose very survival is at risk because they rely upon imported livestock.”

The National Cattlemen’s Beef Association joined the chorus of criticism when President Scott George called the rule burdensome for its additional record-keeping requirements.

In 2009, meat and poultry processors and retailers were required to apply country-of-origin labels to packages at an estimated cost of as much as $500 million to the meat sector in the first year alone, according to AMI.

Costs to meatpackers and retailers are expected to range from $53.1 million to $192.1 million, according to USDA.

“USDA remains confident that these changes will improve the overall operation of the program and also bring the mandatory COOL requirements into compliance with U.S. international trade obligations,” Agriculture Secretary Tom Vilsack said in a statement.

In June 2012, the Appellate Body of the WTO affirmed an earlier WTO panel decision finding that the United States’ COOL requirements for certain meat commodities discriminated against Canadian and Mexican livestock imports and thus were inconsistent with the WTO Agreement on Technical Barriers to Trade.

“Our largest trading partners have already said that these provisions will not bring the United States into compliance with our WTO obligations and will result in increased discrimination against imported products and in turn retaliatory tariffs or other authorized trade sanctions,” NCBA’s George added.

The decision to issue the rule came less than a week after Canadian Agriculture Minister Gerry Ritz said the government planned to develop a list of U.S. products it will target in retaliation for Washington’s country-of-origin labeling law.

On Tuesday, Mexico’s Agriculture Minister Enrique Martinez told Reuters that the rule continued to hurt that country’s beef industry. "We have talked with beef producers in the United States and Canada and totally agree this is an arbitrary decision and means discrimination against Mexican beef, which we will never agree with and as a government will defend against,” he told Reuters.

The rule requires COOL labels to include specific information regarding the three production steps.

  • For example, the U.S. label will state: “Born, Raised, and Slaughtered in the United States.”
  • For meat derived from animals born outside the United States, one type of label may state, for example: “Born in Mexico, Raised and Slaughtered in the United States.”
  • For meat derived from animals imported for immediate slaughter, another type of label may state: “Born and Raised in Canada, Slaughtered in the United States.”
  • Labels for imported meat are unchanged by the rule. Those labels will continue to read; “Product of [Country X].”

To allow the industry to comply with the rule, Agricultural Marketing Service will conduct a six-month industry education and outreach program. USDA said that companies will not need to destroy labels that have been printed but not yet affixed to products. They will be allowed to use those labels until they are out of stock.

“In effect, the agency is picking winners and losers in the marketplace in order to provide information to consumers that recent research shows they care little about and do not wish to pay for,” AMI said.