Full House Likely to Move on COOL, but Senate Remains a Challenge, Say Industry Officials
The House is poised to move on legislation to repeal country-of-origin (COOL) labeling in the coming weeks, but the Senate will be a bigger obstacle, even as Canada and Mexico are ready to retaliate on a laundry list of U.S. exports, said U.S. industry representatives in May 26 interviews. The World Trade Organization dealt a final blow to the U.S. with its rejection of an appeal roughly ten days ago (see 1505180018). The WTO’s Dispute Settlement Body will now consider and likely adopt the rejection at a meeting on May 29 (here), a procedural step that will pave the way for retaliation.
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The House Agriculture Committee decisively passed and sent to the Senate floor COOL repeal legislation in recent days (see 1505210017). House Speaker John Boehner, R-Ohio, is likely to act on the bill quickly, despite a packed legislative agenda that includes several major trade bills, said Dave Warner, spokesman for the National Pork Producers Council. “We expect something fairly soon; I’m not sure about next week, but I think something will get done before 4th of July recess,” said Warner. Boehner’s office didn’t respond for comment.
WTO officials moved forward rapidly with initial steps needed to authorize retaliation, but there are still several stages in the process before retaliation is actually permitted. The WTO dispute settlement body will vote on adoption at a May 29 meeting. Adoption of the report would trigger a series of deadlines (here). The U.S. would have 30 days to announce its intent to “follow the recommendations” of the appellate body report. If immediate compliance with the report is infeasible, the WTO would give the U.S. “a reasonable amount of time” to comply with the directives of the report.
If the U.S. then fails to comply, U.S. negotiators will have to negotiate with Canada and Mexico over “mutually-acceptable compensation,” such as U.S. tariff reductions. If negotiations don’t yield a compromise in 20 days, Canada and Mexico may then ask the U.S. for permission to retaliate, and the WTO has 30 days to consider that request. The Canadian retaliation list targets not only agricultural products, but also processed foods, jewelry, articles of iron or steel, furniture and other products (see 13061022). The Mexican government hasn’t yet published its retaliation list, but Mexican officials have pointed to its tariff hikes in the NAFTA cross-border trucking dispute, which the two sides resolved in 2011, said one industry lobbyist. “The Mexicans have said ‘look at the trucking dispute list,’” said the lobbyist. “But until we see the actual list, it’s hard for us to tell.” That list includes a range of agriculture products, beauty and hygiene products, gas masks and plastic tableware, among many other goods.
Meanwhile, Senate Agriculture Committee Chairman Pat Roberts is intent on moving on COOL legislation as well, said a committee spokeswoman on May 26. “Fixing COOL is a priority for Chairman Roberts, and he is working as quickly as possible to prevent retaliation from our trading partners,” she said. Following the WTO rejection of the U.S. appeal, Roberts said he’s open to repeal, but suggested there may be other options on the table. “I will consider any solution – including repeal regarding meat – that will allow the United States to be WTO-compliant and avoid retaliation from Canada and Mexico,” said Roberts (here). A spokesman for Agriculture Ranking Member Debbie Stabenow, D-Mich., didn’t respond for comment. Stabenow has defended the COOL regime in the past.
The U.S. lacks the time to consider other legislation that would bring its COOL practices into compliance with global trade rules, said Warner and National Association of Manufacturers trade expert Linda Dempsey. “We’ll certainly look at any viable reform option, but it’s hard to see that there is any other option out there that would bring us back into compliance before retaliation takes place,” said Dempsey. “The impact is already there. The threat of retaliation starts to dry up sales overseas … We fully expect that U.S. manufacturing will be very negatively hit by retaliation.”
Despite Robert’s apparent commitment to moving on COOL, industry representatives view the Senate as a more difficult challenge. “The Senate will be a tougher lift; while we hope it will get done there before August recess, that’s going to be tough,” said Warner. “The fix right now is to repeal those offending parts of the law. Beef, pork and chicken labels are our particular concern.” The House repeal legislation keeps in place the labeling regime on venison and lamb (see 1505180065), but the bill is still expected to make U.S. practice consistent with WTO rules, said Warner and Dempsey. Warner stressed the burden the COOL regime places on North American meat producers.