How Will Washington React to the WTO's Final Word on COOL?

UScapitolbuildingUpdate on May 20th: The U.S. House Agriculture Committee, as expected, approved Chair Michael Conoway’s bill to repeal COOL on Wednesday morning by a vote of 38-6. It’s expected the entire House will vote on it in early June.

The final ruling from the World Trade Organization against U.S. mandatory country of origin labeling and the threat of impending retaliation has intensified the pressure to resolve the trade dispute with Canada and Mexico, but it’s still not clear how or when a resolution will be reached.

American lawmakers now have to decide (read: negotiate) how they will respond to the WTO’s final word: do they try to maintain the labeling rules implemented in 2008 and risk WTO-approved trade retaliation from their neighbours to the north and south? Do they wait and see what the retaliation will look like? Do they repeal the legislation as soon as possible, as demanded by the Canadian government? Or do they alter COOL somehow, perhaps implementing a North American-wide label, an option which Canadian officials and some key American lawmakers have rejected?

For insight into the reaction to Monday’s WTO ruling on Capitol Hill, I called long-time Washington-based agricultural correspondent and columnist Jerry Hagstrom (continued below):

“At the moment, what we’ve got are two sides that are positioning themselves for some kind of negotiation, rather than a clear picture of what’s going to happen,” he says.

Hagstrom explains how the anti-COOL crowd, which includes the chair of the House of Representatives Agriculture Committee, wants to repeal the labeling rules as quickly as possible. Chair Michael Conaway (R-Texas) introduced a bill on Tuesday that would eliminate the labeling requirements for beef, pork and chicken. On the other side, the Democrat-leaning National Farmers Union feels the government should not act before the WTO has determined the extent of the retaliation Canada and Mexico are allowed to inflict.

In 2013, the Canadian government published a list of U.S. commodities that are potential targets for retaliation totalling $1.1 billion, but the Canadian Cattlemen’s Association says that number was based on the 2009 version of COOL, and that damages increased with changes made to COOL in 2013.

“So what level of damages have Canada and Mexico experienced? There are high numbers and then there’s a number from the National Farmers Union that’s very low,” says Hagstrom.

Conoway’s bill to repeal COOL will be considered by the House Ag Committee on Wednesday. It’s expected the committee will approve the bill and forward it to the House of Representatives. Conoway indicated on Tuesday that he anticipates the House will vote on the bill in early June. The bill would likely encounter stronger opposition in the Senate.

So while the final WTO ruling and the possibility of retaliation has forced COOL into the spotlight on Capitol Hill, it still remains to be seen how rest of the saga will unfold.

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