Ag Policy Blog

SAN DIEGO -- There doesn't seem to be an easy fix for the U.S. in getting around its Country-of-Origin Labeling problem with Canada.

Canadian Cattlemen's Association President Dave Solverson, a rancher and feeder from Alberta, was at the American Farm Bureau Federation's annual meeting this week along with John Masswohl, CCA's director of international relations.

Canada had a booth at the convention promoting U.S.-Canadian trade as well, which touted the "integrated supply chain" between the two countries when it comes to agriculture. A Canadian government handout at the booth also showed the threatened retaliatory tariffs by Canada would risk trade and jobs in both countries.

"We need a legislative repeal of the current country-of-origin labeling as it is," Solverson said. "Then we will have to get together to see what's acceptable."

The latest ruling last fall on against the U.S. by the World Trade Organization seems to have prompted Agriculture Secretary Tom Vilsack to reassess the options left available for USDA to write yet another possible fix for the current COOL law.

Speaking at the AFBF meeting, Vilsack said it is difficult to come up with an effective labeling program for country-of-origin without segregating livestock. Yet that's the area of the USDA rule that hit a stumbling block with the World Trade Organization. The WTO says segregating Canadian and Mexican livestock essentially leads to discriminatory practices against producers from those countries.

"I'm now between a rock and a hard spot where Congress told me to do one thing and the WTO tells me I can't do what Congress told me," he said.

A funding bill passed in in December requires USDA to bring back to Congress a proposed fix by May 1. Vilsack told members of the Iowa Farm Bureau on Monday at a breakfast discussion that Congress needs to come up with a fix for the law.

"There is not regulatory fix," Vilsack said. "We have tried everything we possibly can and we have basically told Congress."

The U.S. is appealing the latest WTO ruling and a hearing is scheduled for February. A final ruling on the appeal could come out in late spring. If the WTO appeal fails, Congress may have to rescind or repeal the law or come up with a more generic "North American" label. "There are a lot of folks who don't like that answer," Vilsack said. "I get that."

Solverson said mandatory segregation of animals through the supply chain is the major problem, though he doesn't have a problem if the law is repealed and packers opted to voluntarily segregate cattle."

Those groups of segments of the industry who want to promote U.S. beef should create a branded program in the value chain, Solverson said.

"We have no opposition to voluntary branding programs," he said.

Canada is proposing 100% tariffs on some U.S. products in industries beyond agriculture, which would actually shut down trade of those products, Solverson said.

Vilsack noted Canada and Mexico are going to look at congressional districts and states where they can level retaliatory measures that have the biggest impact.

The secretary noted COOL was driven by smaller and mid-sized producers who were trying to find a way to promote domestic beef. Perhaps an option is to help those producers by developing local and regional markets where those producers can be competitive.

"That seems to be to me a far better answer than this constant stress that takes place in agriculture between various levels of agriculture and basically leads to us working against ourselves," Vilsack said.

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