Vilsack says he's cool with bringing back U.S. COOL, if it's WTO compliant

Not only is Tom Vilsack set to return as U.S. secretary of agriculture, he’s also open to bringing back U.S. country-of-origin labelling (COOL) for beef and pork; but only if it doesn’t lead to retaliation from trading partners, such as Canada, under World Trade Organization (WTO) rules.

Vilsack, who was ag secretary when the Obama administration fought to maintain and later repealed COOL after a lengthy WTO challenge by Canada and Mexico, was asked about re-implementing the mandatory labelling regime during his Senate confirmation hearing held on Tuesday (Groundhog Day, appropriately, for those of you who feel like you’ve seen this before).

“I’m happy to work with you and your staff on anything that would allow us to advance country-of-origin labeling,” he said, responding to South Dakota Senator John Thune. “If there’s a way to get it WTO-compliant, I would be more than happy to work with you and look forward to that.”

While showing support for the concept, he stressed the need for it to fit within the United States’ WTO obligations.

“If it’s the same policy as it was four years ago when I left, the answer is no,” Vilsack told Nebraska Senator Deb Fischer.

“I’m absolutely willing to listen to anybody and everybody who’s got an idea how we can circumvent or get to a point where the WTO doesn’t slap it down, that creates retaliatory impacts on American agriculture,” he noted. “I’m frank to say I need help in that respect. We can ignore the WTO, but then we get the retaliation, and that’s just not a good situation.”

Mandatory COOL was first implemented in the U.S. in 2008, and was repealed in December 2015 after the WTO’s dispute settlement body ultimately agreed with the Canadian and Mexican governments and livestock sectors argument that the labelling requirements discounted non-U.S. born cattle and pigs. After spending more than six years exhausting all dispute settlement options through the WTO, Canada and Mexico were on the verge of implementing US$1 billion in WTO-approved tariffs on American exports to make up for damages caused by the labelling rules.

Fast forward just over five years, and Canada still retains the legal right to implement those retaliatory tariffs if the U.S. reintroduces a similar COOL requirement, explains Dennis Laycraft, general manager of the Canadian Cattlemen’s Association. The CCA, together with the Canadian Pork Council, led the Canadian livestock industry’s effort to end mandatory U.S. COOL.

“Canada can legally retaliate with over $1 billion in duties,” says Laycraft, responding to Vilsack’s comments in the Senate confirmation hearing on Tuesday. “It is important to note that the legal burden now has shifted to where the United States must prove that any new measure complies with the WTO. The duties would legally remain in place while the dispute is being adjudicated.”

While President Biden has talked about rebuilding the United States’ relationship with the WTO, the multilateral trade institution’s dispute settlement process is still in shambles, with the U.S. holding up appointments of judges to key panel positions.

Vilsack’s nomination, meanwhile, received unanimous approval from the Senate agriculture committee on Tuesday, virtually guaranteeing approval from the full Democrat-controlled Senate.

You can watch Vilsack’s Senate confirmation hearing here.

Related: Have Democrats played Canada as a political pawn for four years?

A COOL Timeline:

May 13, 2002 — The 2002 U.S. Farm Bill becomes law, requiring retailers to inform consumers of the country of origin for perishable agricultural commodities.

June 2002 — Canadian hog sector representatives distribute pamphlets opposing COOL at the World Pork Expo in Iowa.

2003 and 2005 —Implementation of mandatory COOL for cattle and hogs is delayed.

June 18, 2008 — The 2008 U.S. Farm Bill becomes law, maintaining the 2002 Farm Bill mandate to implement COOL.

August 1, 2008 — The US Department of Agriculture’s interim rule for COOL is published.

September 24, 2008 — Shaun Haney publishes the first post on RealAgriculture.com.

September 30, 2008 — The interim rule for COOL takes effect. Canadian cattle and hog values are discounted and exports drop as U.S. packers begin to segregate animals to meet the labeling requirements. Rather than tracking Canadian cattle and pigs, U.S. meat packing companies refuse to accept them — COOL Rears Its Ugly Head.

January 20, 2009 — Barack Obama becomes U.S. President.

March 16, 2009 — The final rule for COOL is implemented, making country of origin labeling mandatory for muscle cuts and ground beef (including veal), pork, lamb, goat, and chicken; wild and farm-raised fish and shellfish; fresh and frozen fruits and vegetables; peanuts, pecans, macadamia nuts, and ginseng.

April 28, 2009 — Minister for International Trade Stockwell Day announces that Canada will request consultations at the WTO regarding COOL. Mexico joins Canada in asking the World Trade Organization to review COOL in mid-May.

November 18, 2011 — The WTO Dispute Panel rules in Canada’s favour, saying COOL discriminates against Canadian livestock in the U.S. market. (The first ruling against the U.S.)

March 23, 2012 — The U.S. government announces it will appeal the WTO Dispute Panel ruling.

June 29, 2012 — Following the appeal process, the WTO upholds the Dispute Panel ruling that COOL results in less favourable treatment to imported Canadian cattle and hogs than to domestic cattle and hogs. An arbitrator later sets the deadline for compliance as May 23rd, 2013. (The second ruling against the U.S.)

May 23, 2013 — U.S. Implements Changes to COOL — The U.S. government tweaks COOL with new labeling requirements, arguing the changes bring the legislation into WTO compliance. The Canadian and Mexican governments disagree, saying the amendments increase the discrimination against imported livestock.

June 7, 2013 — The Canadian government publishes a list of U.S. products that could face retaliatory tariffs totalling approximately $1.1 billion (the list can be found here.)

September 25, 2013 — The WTO grants Canada’s request for a compliance panel to decide whether the May 23rd, 2013 changes to COOL meet the Americans’ international trade obligations.

February 7, 2014 — Cattle Industry’s Beef Ignored, Farm Bill Signed Anyway — Barack Obama signs the 2014 Farm Bill, extending provisions for COOL.

October 20, 2014 — WTO Rules Against U.S. on COOL (Again) — The WTO Compliance Panel sides with Canada again, saying U.S. amendments to COOL continue the discrimination against live imports of cattle and hogs. The past-president of the Canadian Pork Council discusses the possibility that proceeds from retaliatory tariffs could be used to reimburse livestock producers for losses caused by COOL. (The third ruling against the U.S.)

November 28, 2014 — U.S. Appeals WTO mCOOL Ruling (Again); Appeal Postpones Possible Sanctions — Again, the U.S. government appeals the WTO compliance panel ruling.

February 2015 — U.S. Makes Final Argument for COOL at WTO. Ag Minister Gerry Ritz declares “COOL is on life support.”

May 4, 2015 — USDA Finds Little, if any, Economic Benefit From COOL — a USDA study finds COOL does not translate into increased consumer demand, and benefits do not offset higher production costs and retail prices.

May 18, 2015 — WTO Appellate Body rules in Canada and Mexico’s favour again — the fourth and final ruling from the WTO on COOL. Canada seeks permission from the WTO to implement retaliatory tariffs on American imports.

June 4, 2015 — Canada’s trade and agriculture ministers — Ed Fast and Gerry Ritz — formally request permission from the WTO to implement $3 billion per year in sanctions for damages caused to the Canadian cattle and hog industries.

December 7, 2015 — The WTO gives Canada permission to implement retaliatory tariffs worth up to C$1.055 billion per year.

December 18, 2015 — The U.S. House and Senate vote in favour of an omnibus spending bill that includes language to repeal COOL for beef and pork. President Obama signs off on the legislation. COOL remains in effect for other perishable food products, including chicken; lamb; goat; fish and shellfish; and most nuts.

December 2019 — Montana Senator Jon Tester introduces a resolution to reinstate COOL for beef and pork, as some U.S. beef groups, such as R-CALF and the United States Cattlemen’s Association, continue to push for it. Tester followed it up with another resolution in the Senate in May 2020 urging the President to require the U.S. Trade Representative to enter into trade negotiations to implement mandatory COOL for beef.

February 2021 — U.S. Ag Secretary nominee Tom Vilsack says he’s willing to move ahead with COOL, as long as it’s WTO-compliant.

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