The recent theatrics over Trade Promotion Authority suggest that our political leaders in Washington aren’t serious about international trade.
Amid the fighting over TPA, however, the House of Representatives did something sensible on June 10, when it passed a bill to make it easier for ranchers to buy and sell across our borders, for the good of consumers.
Now the Senate should follow the lead of the bipartisan majority in the House and approve the Country of Origin Labeling Amendments Act. Then President Obama should sign the legislation into law.
This is the only way for the United States to avoid a costly trade war with Canada and Mexico.
The crisis began several years ago, when Congress called for “country of origin labeling,” or COOL. It required meatpackers to label their products, identifying where animals are born, raised, and slaughtered.
COOL sounded good in theory and it even had a nifty acronym—but in practice, it turned out to be a gigantic mess. We learned, for instance, that the vast majority of consumers don’t care if the beef, pork or poultry they buy in grocery stores is partly a product of Canada. When they look at labels at all, it’s to judge quality and price, not to discriminate on the basis of national origin.
Moreover, the labels don’t make our meat safer. We already have regulations for that. All the meat sold in the United States, whether it’s from one of my feedlots in the U.S. or from a competitor’s feedlot in Manitoba, must undergo mandatory inspections.
COOL alters none of this. Instead, it forces ranchers and processors to segregate livestock through every phase of production, for the sake of labels that almost nobody bothers to read.
The regulation accomplishes only one thing: It makes our food more expensive. In April, the Department of Agriculture estimated that COOL costs consumers more than $2.6 billion per year.
We shouldn’t subsidize a pointless regulation. That money belongs in the pockets of Americans, especially in our slow-growth economy.
To make matters worse, COOL violates our international trade agreements with Canada and Mexico, two of our top trading partners. It jacks up the price of their products for no good reason. They’ve complained for years that COOL is pure protectionism.
On May 18, the World Trade Organization, which oversees international trade disputes, agreed. It ruled against the United States on this matter—for the fourth time. We’ve exhausted our appeals.
Now we must move from appealing to repealing—and get rid of COOL forever.
If we don’t, Canada and Mexico will make us suffer. That’s because the WTO has granted them the right to impose more than $3 billion in retaliatory tariffs on products made in America. In other words, the WTO has sanctioned a trade war.
“The only way for the United States to avoid billions in immediate retaliation is to repeal COOL,” warned Gerry Ritz, Canada’s minister of agriculture.
As much as the patriot in me wants to shake my red-white-and-blue fist at the WTO—an organization based in Switzerland—I can’t fake the outrage. The truth is that we’re in the wrong. The United States started this trade war when we approved COOL. The time has come to make things right.
The solution is simple: Put the freeze on COOL, as the House of Representatives just voted to do, and replace it with a system of voluntary labels. Consumers who really want to know where their chickens hatched will be able to acquire this information, though they may pay a premium for it. The rest of us can purchase safe food at a more reasonable price.
This is a mainstream approach, supported by the COOL Reform Coalition, a diverse group whose members include everything from the American Bakers Association to the Wine Institute.
It’s also a chance for Democrats and Republicans to prove that they can do more than merely bicker about free trade—they can actually make a positive change for the sake of food producers and consumers alike.
Carol Keiser owns and operates cattle feeding operations in Kansas, Nebraska and Illinois. She volunteers as a Truth About Trade & Technology board member (www.truthabouttrade.org).