October 25, 2014

WTO Rules Against U.S. Country of Origin Labeling

The World Trade Organization has again ruled against Country of Origin Labeling. The WTO compliance panel decided the rule was less favorable to meat imports from Canada and Mexico and more favorable to domestically produced meats. The ruling was announced Monday. The panel concluded the amended COOL measure “increases the original COOL measure’s detrimental impact on the competitive opportunities of imported livestock in the US market,” according to the reports released by the WTO. The panel pointed to the incentive to choose domestic over imported livestock and a higher recordkeeping burden contributed to the ruling. The United States can appeal the ruling.

Canada’s Agriculture Minister Gerry Ritz told Canada Today he expected the U.S. to appeal. A U.S. Trade office spokesperson told the Hagstrom report  “we are considering all options, including appealing the panels’ reports.” Earlier this year, Canadian agriculture officials said retaliations are likely if the rule is implemented. Ritz said Canada calls upon the U.S. to enact legislative change to eliminate COOL’s discriminatory treatment against Canadian hogs and cattle.”

Response to Ruling

As groups respond to the recent ruling by the World Trade Organization against Country of Origin Labeling, two messages are clear. Groups opposed to the measure are calling on congress to help stop potential tariffs or bring the rule to compliance. Groups in favor of the measure vow to continue fighting for the measure, noting the WTO simply needs the rule to be in compliance with world trade rules. National Catlemen’s Beef Association President Bob McCan stated the announcement “brings us all one step closer to facing retaliatory tariffs from two of our largest trading partners.” Further, he said there is no regulatory fix to bring COOL into compliance.”  

The National Pork Producers Council President Howard Hill said “Congress and the White House need to address this now.” American Soybean Association President Ray Gaesser said the decision “ only solidifies what we in the industry already knew to be true: that mandatory country of origin labeling in its current state is an unworkable burden on soybean farmers’ largest customers—the animal agriculture industry.”

The United States Cattlemen’s Association reiterated strong support for the rule. USCA President Danni Beer said “The WTO has never said we cannot require country-of-origin labeling” but rather it needs to be sufficient.” He said this action by the WTO provided “no basis for false alarms about repealing the COOL statute itself.  The National Farmers Union called the ruling positive that the problem is not the rule, but rather how it is to be implemented.

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Report Says Agriculture Is Becoming Burden In China

According to a report in the New York Times, agriculture is becoming a burden for China. The article states many farmers have migrated to cities after becoming frustrated by how little they earn. Farm output in China remains high but they point to rural living standards that have failed to keep up with the pace of the nation’s cities. The most recent figures show a threefold gap between urban and rural incomes, fueling discontent and helping to make China one of the most unequal societies in the world. Farmers do not own their land in China, according the report. It begins with the fact that farms in China are too small to generate large profits, about 1.6 acres on average, compared with 400 acres in the United States.

The nation’s Communist leaders have declared that fixing the countryside is crucial to maintaining social stability. Last year, they unveiled a new blueprint for economic reform with agricultural policy as a centerpiece. Privatizing farmland would allow market forces to create bigger farms. The report also outlines that because farmers do not own their land, very few can get a loan to pay to rent others land.

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Senators Sign Letter Supporting Country of Origin Labeling Law

32 Senators have signed onto a letter supporting U.S. Country of Origin Labeling laws. The law is again in the courts and faces World Trade Organization scrutiny. The U.S. Cattlemen’s Association commended the Senators who have pledged their support for the law. The letter urges the Senate Appropriations Committee leadership to reject any efforts to weaken or suspend COOL through upcoming legislation. The letter states “The Senate should not undermine the United States’ position by inserting a legislative rider into an appropriations bill before with U.S. trade obligations. 

USCA officials say they, along with a coalition representing a large number of producer and consumer groups will continue to defend COOL via the legislative, regulatory and judicial process. USCA President Danni Beer, Keldron, SD stated, “This is exactly the message that U.S. producers want to convey to Congress.  USCA encourages this bipartisan group of policy-makers to stay engaged in defending COOL.”

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