USDA Finds Little, if any, Economic Benefit From COOL

Just weeks before the World Trade Organization rules on the U.S. government’s final appeal to maintain mandatory country of origin labeling (COOL) rules, the U.S. Department of Agriculture issued a report to the House and Senate agriculture committees on Friday saying the meat labeling laws have little, if any, measurable economic benefit.

The USDA’s economic analysis of COOL, which was mandated in the 2014 Farm Bill and largely based on a report completed in January, said “although consumers desiring COOL information benefit from its provision, there is insufficient evidence to conclude that such benefits translate into measurable increases in consumer demand for beef, pork, or chicken.”

The study also noted the benefits of COOL are offset by higher production costs and an increase in retail prices for American consumers:

“The increased costs of producing, processing, and marketing food products to comply with COOL without a commensurate measurable increase in consumer demand results in economic losses to producers, packers, retailers, and consumers and leads to a smaller overall industry with higher consumer prices and less product available.”

COOL supporters, including U.S. National Farmers Union president Roger Johnson, say Congress should wait until the WTO ruling before modifying COOL.

“The announcement from the WTO on this lawsuit is due in just weeks, and we may win. If not, it can still be brought to arbitration. And that’s why it’s important that Congress refrain from making any changes to the popular labeling law until this process has run its course,” noted Johnson. “To do otherwise would not only be unprecedented in U.S. history, but would also be a disservice to consumers who support COOL by a margin of 90 percent, according to decade’s worth of polling.”

An appeal ruling from the WTO’s Appellate Body is expected on or before May 18th. If it upholds previous decisions against COOL, the Canadian government could move toward implementing retaliatory tariffs on U.S. imports.

Coinciding with the release of the economic study on Friday was another USDA report looking at options for complying with previous WTO decisions against COOL. One alternative the USDA is considering is a generic “Made in North America” label, which Canadian livestock industry officials have rejected. In a statement, House ag committee chair and COOL opponent Michael Conaway said a generic mandatory label would provide no useful information to consumers and do nothing to mitigate the threat of trade retaliation.

“If the governments of Canada and Mexico do not accept this option, retaliation would continue. Our trading partners have already said this option is unacceptable, so it is perplexing that USDA would ignore basic facts and put forward an approach that would only serve to exacerbate the current situation,” noted the Republican from Texas. “In order to avoid what could be devastating retaliatory sanctions against U.S. businesses if we lose, the starting point needs to be that mandatory COOL for meat is a failed experiment which should be repealed. The House Agriculture Committee is prepared to lead on this issue.”

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