“It is crucial to address any issues that threaten or diminish the cattle and beef trade between Canada and the U.S.,” said Nathan Phinney, president of the Canadian Cattle Association, in a media release. “We are very concerned that the rule will lead to discrimination against live cattle imports and undermine the beneficial integration of the North American supply chain.”

The USDA’s final “Product of USA” rule comes into effect Jan. 1, 2026, and will restrict companies from adding a “Product of USA” or “Made in the USA” label to meat, poultry and egg products unless the animals they came from were born, raised, slaughtered and processed in the U.S.

Why it matters: Despite “voluntary” in the name, livestock sectors worry that, in practice, the rule will have the same pitfalls as mandatory country of origin labelling, which sparked years of trade challenges and was struck down in 2015.

The objection from Canadian livestock producer groups, as well as the Canadian government, is that the ruling may stifle access to American markets.

In a joint statment, Canadian agriculture minister Lawrence MacAulay and international trade minister Mary Ng said they were “disappointed that the final rule does not appear to take into account the concerns we have continually brought forward related to our unique and important trading relationship.”

They said they plan to raise the issue when top agricultural officials from the United States and Mexico meet in Colorado later in March.

Mexico’s Ministry of Agriculture and Rural Development issued a release expressing similar disappointment in the ruling.

The USDA said the new ruling simply closes a loophole.

“The rule will prohibit misleading U.S. origin labelling in the market and help ensure that the information that consumers receive about where their food comes from is truthful,” read a news release accompanying the March 11 announcement.

Defining ‘voluntary’

The sides — Canada and Mexico versus the U.S. — stacked up similarly against the now defunct mandatory country of origin labelling (mCOOL) law enacted in 2008. It remained in place until 2015 and raised hackles in Canada and Mexico. They argued that it contravened U.S. trade obligations between the three countries.

The law required animals to be segregated if not attached to a U.S. origin label. Canada argued that the red tape and cost of this segregation equated to a trade barrier. A bitter trade battle ensued, culminating in a decision from the World Trade Organization that approved Canada and Mexico to institute billions in retaliatory tarriffs in 2015.

In the wake of the decision, the U.S. spiked COOL.

Six years later, the issue came back to the surface. In February 2021, during U.S. Agriculture Secretary Tom Vilsack’s Senate confirmation hearing, Vilsack said he would look at ways to advance a WTO-compliant version of the regulation.

Armed with a survey that found 65 per cent of Americans felt that meat labelled “Product of the U.S.A.” came from animals born, raised and slaughtered in the U.S., Vilsack announced his WTO workaround a year ago. This time, the policy would be voluntary.

Canadian livestock producer groups say mCOOL and vCOOL will have largely the same effect.

CCA executive vice-president Dennis Laycraft said the ruling could have a big impact on the Canadian livestock industry should the same market segregation seen during mCOOL re-emerge.

“That really comes down to how many of the sellers of U.S. beef actually choose to use this label,” he said. “If it becomes a condition of trade down there, it becomes de facto mandatory.”

Market integration

The Canadian Pork Council is worried about reduced North American livestock trade. In a media release, chair René Roy expressed concern that it could disrupt the market integration of the North American sector.

“These changes, like the original mandatory policy successfully challenged at the World Trade Organization, will have an impact on trade in the integrated Canada/U.S. market,” said Roy. “We are again expressing our disappointment that the final rule did not consider the concerns expressed by Canada and by our American colleagues.”

Laycraft echoed Roy.

“The market integration benefits consumers and the industry in all three countries,” he said. “Those market efficiencies that make food more affordable also make us more competitive internationally.”

Alternatives

Laycraft also said the USDA ruling was unecessarily contentious.

“There were other options available in this rulemaking that were ignored that I think would have respected the benefits of the integrated market,” he said.

One of those options was a label already in existence that said essentially the same thing, according to Laycraft.

“The ‘Born, Raised and Slaughtered in the USA’ label is available for anybody to put on a product if they want; they just have to process-verify it,” said Laycraft. “If there was a strong market demand for it, people would have already been doing it.”

Does it matter to consumers?

The USDA survey that helped underpin the new regulation did test for consumer demand. It gauged consumer willingness to pay a premium based on various labels.

The study showed that consumers said they were willing to pay 35 per cent more for ground beef with a “Product of the USA” label and were willing to pay 24 per cent more for ground beef labelled “Born, Raised and Slaughtered in the USA.”

However, for higher-quality cuts, the advantage flipped in favour of the “Born, Raised and Slaughtered in the USA” label. Consumers said they were willing to pay a 37 per cent premium for New York strip steak labelled in that way, and a 32 per cent premium if it was labelled “Product of the USA.” Results were similar with pork tenderloin.

Laycraft said that kind of labelling doesn’t affect consumers as much as one might think.

“In every survey that I’ve seen, price and quality are the number one and two items affecting (willingness to pay),” he said. “The U.S. and Canadian grading systems mean far more to consumers than this does.”

He is not concerned that American consumers will reject products without the origin label, he said. It’s about whether a critical mass of companies will use this voluntary measure and relegate Canadian livestock to the situation they left nine years ago.

“We’re monitoring whether it will change market behaviour down there,” said Laycraft.

If the Canadian sector can demonstrate the ruling leads to the same segregation as mCOOL , the WTO will likely rule in their favour again, he added.

“The WTO case we won was really about the unfair discrimination against imports; it wasn’t specifically about the mandatory rule.”

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The bill would set out processor fines of $5,000 per pound of beef that doesn’t meet label standards.

Why it matters: A proposed new version of country of origin labelling in the U.S. is being watched carefully by Canada’s beef sector.

COOL, or country of origin labelling, surged back into the headlines this year, eight years after the U.S.’s mandatory COOL system was repealed in 2015 after a bitter trade dispute between the U.S., Canada and Mexico.

In March, the U.S. proposed a regulation that would require animals to be born, raised, slaughtered and processed in the U.S. (as opposed to just processed), in order for beef to be labelled as U.S.-made. Labels would be voluntary rather than mandatory.

The Canadian meat sector argued the differences would be largely semantic and, in practice, the results would be much the same as mandatory COOL.

In January, proposed legislation was also introduced in the U.S. Senate, which sought to re-instate mandatory COOL rules on beef. It relied on the Office of the U.S. Trade Representative to bring back the requirements without prompting a trade dispute. That bill was read twice before being shifted to the body’s ag committee.

The recent proposal reportedly dovetails with that January legal effort.

Skepticism

Canadian experts say the newest proposal is unlikely to be supported among U.S. lawmakers.

University of Guelph associate professor Rakhal Sarker, who researches the economics of agri-food trade, noted similar policy has previously failed.

“You know what happened to the previous COOL, right? It didn’t succeed, and WTO (World Trade Organization) authorized Canada and Mexico to impose duties on U.S. products so they can recover the damage,” he said.

He expects American politicians will keep that track record in mind when assessing the new proposal.

Canadian Cattle Association executive vice-president Dennis Laycraft similarly suggested the recent push is not unprecedented.

“There’s been a number of different senators who have been trying to bring some language to bring back mandatory country of origin labeling,” he said.

“The [Biden] administration … are still saying anything that is done has to be compliant with the World Trade Organization and their international obligations… What’s being proposed clearly, in this particular bill, would not be, so they don’t believe it’s likely to go anywhere, but we follow it closely anyway.”

Laycraft said previous rules with similar goals proved financially inefficient.

“The irony in that is, when those goals were in, that were eventually overturned at the WTO, their own analysis showed … the previous measure would have cost the U.S. industry over $8 billion,” he said.

“It led to segregation within the system. Cattle that we exported either as feeder or animals that were ready to go to processing were discounted about $45 an animal on average.”

A similar labelling plan in Canada has little traction, he added.

“For the most part, that’s been fairly well addressed on our side. We have a trademark label that many retailers use.”

Sarker said that even if this particular American proposal were to pass, it would likely pose no major threat to the Canadian ag sector.

“It will reduce the progress of e-commerce and probably that would have a ripple effect in Canada,” Sarker said. “But I don’t think the e-commerce is so big that it will have any significant damage to our major sectors.”

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“One of the great strengths of the U.S.-Canada bilateral relationship is the successful integration of our meat and livestock sectors,” the submission said.

The Canadian government made its submission June 9 as part of U.S. consultations on voluntary country of origin labeling (vCOOL) for U.S. meat, poultry and eggs.

The Biden administration proposed the rule in March in response to lobbying from U.S. ranchers, Reuters reported at the time. The rule would limit “Product of USA” and similar labels to products derived from animals that were born, raised and slaughtered in the U.S. However, it would not require products to carry an origin label.

Under current rules, animal products can be labelled as “Product of USA” if animals were processed in the U.S., even if they were born and raised elsewhere.

In 2022, total U.S.-Canada trade in live cattle, hogs, poults and chicks, hatching eggs, beef and pork was worth more than US$8 billion, according to the recent Canadian submission.

Canada has argued that supply chains operating under the proposed rules will have to segregate Canadian and U.S. animals and products. This would be costly and inefficient and discourage companies from using Canadian inputs.

A similar rationale led to the downfall of vCOOL’s mandatory predecessor, struck down in 2015 following a World Trade Organization challenge that ruled in favour of the complainants, Canada and Mexico.

The new proposed rule could also harm U.S. producers, the Canadian government said.

“For example, in recent years, there has been an increase in live cattle exports from the United States to Canada due to feedlot capacity expansion in Canada, higher processing volumes, and strong demand for beef,” the submission read.

“Under the new proposed rule, if an American rancher sends an animal to a Canadian feedlot, by virtue of availability, proximity, or economics, that is then sent back to the U.S. for slaughter and processing, that product would no longer be allowed to bear a ‘Product of USA’ claim.”

The rule also fails to account for supply-chain integration in border states and provinces, the submission claims. It would put undue pressure on processing facilities, especially small or medium-sized plants, to source American inputs when Canadian inputs are closer at hand.

The Canadian government requested that the U.S. “pauses and reconsiders the proposed rule in order to allow for consultations between Canadian and U.S. officials.” –– Manitoba Co-operator staff

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The USDA Food Safety and Inspection Service is seeking comment until May 12 on a plan to tighten its meat labelling rules to require products labelled as “product of the USA” to consist only of meat from animals born, raised, slaughtered and processed in the U.S. 

As it now exists, marketers can use the so-called PUSA label on meat or poultry products made from imported animals, mainly from Canada or Mexico, and then fed and slaughtered domestically. They can also use it on meat products imported, repackaged or further processed in the U.S. 

The implications of the change could be profound for Canadian producers who annually ship about 4.8 million feeder pigs, 840,000 slaughter hogs and 600,000 to 700,000 head of cattle to U.S. buyers. 

With North American cattle herds dipping to 60-year lows, the free flow of trade between the two countries is more important than ever to keep meat on consumers’ tables. 

Use of the proposed label is voluntary, which is significantly different from the mandatory country-of- origin labelling law that plagued the Canadian industry between 2008 and 2014. 

The mCOOL required all meat sold in the U.S. to carry a label declaring where it originated. In practical terms, it meant that U.S. processors had to segregate Canadian and U.S. animals before processing them, which caused them to either shy away from buying Canadian-born animals or pay a lot less. 

That regulation was eventually shot down by the World Trade Organization in 2012, but not before it cost the Canadian industry billions in lost sales and more than $4 million in legal fees as lawyers ushered the grievance through diplomatic channels and, ultimately world trade courts. 

So meat marketers don’t have to use the PUSA label, but if they do, they would have to comply with it provisions. 

As with most trade hiccups, this one is politically motivated. Industry organizations who feel imported livestock undermines American producers have petitioned the federal regulator three times since 2018. Legislation calling for the change was introduced to the House of Representatives and the Senate in 2021. 

The Canadian government says it is monitoring the situation with concern, as are organizations representing Canadian cattle and hog producers. 

Do consumers really care? 

The USDA commissioned research firm RTI International to survey consumers on three questions: Do consumers notice the “Product of USA” labels? Second, do they understand the meaning of that label and other USDA labelling related to quality? Thirdly, how much more are they willing to pay? 

When consumers viewed a mock meat product and were then asked to recall what they saw, only one in 10 remembered seeing the label. If it also carried an icon of the American flag, their recall rose to one in three. 

Nearly 80 per cent remembered seeing the label if they were explicitly asked whether they saw it. However, 15 per cent of respondents reported seeing the label even when it wasn’t on the package, a testament to how much noise there is around product labelling. 

Only 16 per cent of consumers knew the current label applies to products processed in the U.S. but not necessarily from animals born there. Nearly two- thirds believed all production steps took place in the U.S. 

Consumers said they were willing to pay 24 to 43 per cent more for meat products sold under the label by either definition. However, a second cost-benefit analysis found the price premiums for U.S.-origin claims to be small relative to other marketing claims such as organic, grass-fed, no antibiotic or hormones, or natural — some of which have no regulated definition. 

So, this change might make a few politicians feel good, but it won’t put many more dollars into American farmers’ pockets. 

As for the Canadians, no one knows whether this proposed change will be a wrinkle or a rift in the live animal trade between the two countries. It’s a safe bet that it won’t help.

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The U.S. Department of Agriculture and its Food Safety and Inspection Service (FSIS) on Monday announced they plan to publish a new proposed rule on U.S. meat origin labels for a 60-day public comment period.

USDA said in a release the new rule will offer “new regulatory requirements to better align the voluntary ‘Product of USA’ label claim with consumer understanding of what the claim means.”

USDA said Monday it undertook a review starting in July 2021 “to understand what the ‘Product of USA’ claim means to consumers and inform planned rulemaking.”

The department said it found in a related survey of U.S. consumers that “a significant portion believ(es) the claim means that the product was made from animals born, raised, slaughtered and processed in the United States.”

A “Product of USA” label claim would continue to be voluntary under the new rule, and would also still be eligible for “generic label approval” — meaning it would not need FSIS pre-approval before it could be used on regulated product.

However, the new rule would require that supporting documentation for so-labelled products be kept on file for FSIS personnel to verify.

Apart from the “authorized” label claims for ‘Product of USA’ or ‘Made in the USA,’ the rule also proposes to allow other voluntary U.S. origin claims seen on meat, poultry and egg products sold in the marketplace.

However, those other claims would need to include a description on the package of “all preparation and processing steps that occurred in the United States upon which the claim is made.”

Those other label claims are described as “qualified” claims. “Sliced and packaged in the United States, using imported pork” was given as an example of a qualified claim.

Currently, USDA said, FSIS-regulated products coming from animals that may have been born, raised and slaughtered in another country but are “minimally processed” in U.S. facilities may currently be labeled as ‘Product of USA.’

That policy, USDA said, “may be causing false impressions about the origin of FSIS-regulated products in the U.S. marketplace.”

“American consumers expect that when they buy a meat product at the grocery store, the claims they see on the label mean what they say,” U.S. Agriculture Secretary Tom Vilsack said Monday in the department’s release. “These proposed changes are intended to provide consumers with accurate information to make informed purchasing decisions.”

‘No evidence’

However, the North American Meat Institute, a U.S. lobby group representing beef, pork, lamb, veal and turkey packers and processors, said the proposed new rule “uses the same standard” as the mandatory COOL statute Washington repealed in 2015.

Mandatory COOL was first developed during the Clinton administration, passed near the end of the George W. Bush administration in 2008 and put in place during the Obama administration in 2009. It imposed mandatory origin labels for beef, pork, lamb, chicken and goat meat and certain other perishable commodities where sold at retail in the U.S.

Canada and Mexico responded by challenging COOL at the World Trade organization and in U.S. courts, because the COOL rules — as applied by Vilsack as the Obama administration’s ag secretary — called for U.S. processors of meat from imported animals to provide labels that detailed where the specific animals involved in a given package of meat were born, raised and slaughtered.

The costs involved in segregating animals and production lines to follow the COOL law prompted some U.S. packers and processors to restrict or halt their imports or cut the prices they paid for Canadian cattle and hogs. Some estimates at the time pegged Canadian cattle and hog producers’ losses to reduced prices and lost sales at over $8 billion.

Washington-based NAMI said the U.S. government “lost four times” against Canada and Mexico before the WTO in 2015 authorized those countries to levy over US$1 billion in retaliatory tariffs on U.S. goods if the COOL rule wasn’t withdrawn.

By comparison, the new rule announced this week would limit the use of voluntary ‘Product of USA’ claims, so that only products made from livestock born, raised, harvested and processed in the U.S. could be so labelled, NAMI said.

But such a rule, NAMI said, “will have a discriminatory effect, causing meat packers and processors who wish to make the claim to segregate cattle, hogs, and meat from other nations.”

That segregation “was the basis for the WTO finding and is what allows Canada and Mexico to levy tariffs on American goods,” NAMI said.

Canada and Mexico “still retain that (WTO) authorization” for retaliatory tariffs, NAMI said, and any new label law that uses the same standard as mandatory COOL would allow those countries to “initiate retaliation with no further action by the WTO.”

NAMI also claims the proposed new label rule would actually be “broader than mandatory COOL” because it would also cover processed products, and products intended for foodservice, none of which were subject to the COOL rule.

The lobby group emphasized consumer opinion and transparency are “important to the meat and poultry industry” but said “there is no evidence this rule will increase already high consumer demand for meat and poultry products.”

Also, while supporters of the former COOL and the proposed new rule “like to claim” mandatory COOL increased the prices U.S. beef producers received in the years before that rule’s repeal, “this assertion ignores basic supply and demand fundamentals,” NAMI said.

“In 2015, cattle prices saw record highs because there was a limited supply of cattle to harvest increasing demand. And today, without COOL, cattle prices are again approaching record highs, also due to supply and demand.”

The proposed new rule also “does not consider the integrated nature of the North American meat and poultry industry,” NAMI said. “Livestock and meat products from Canada and Mexico are shipped, tariff-free, across the border for slaughter and processing in the United States. Likewise, meat products are shipped from the United States to Canada and Mexico.”

That “integrated competitive market” allows for more affordable beef and pork for U.S. consumers, NAMI said.

“Unfortunately, this proposed rule is problematic for many reasons. USDA should have considered more than public sentiment on an issue that impacts international trade,” NAMI CEO Julie Anna Potts said in a release.

Will review

In a separate statement Tuesday, Canada’s Agriculture Minister Marie-Claude Bibeau and Trade Minister Mary Ng concurred that the Canadian and U.S. meat and livestock sectors are “highly integrated” and that collaboration “contributes to the growth and resilience of farmers and processors on both sides of the border.”

Canada “remains concerned about any measures that may cause disruptions to the integrated North American livestock supply chains,” they said, and will “closely review” the proposed new rules.

The ministers said the federal government will also “participate in the U.S. rule-making process” to make sure the new rules adhere to Washington’s international trade obligations and won’t disrupt supply chains.

Bibeau and Ng also emphasized the Canadian government remains “firmly opposed” to any U.S. proposition that would attempt to revive a mandatory COOL system.

According to Agriculture and Agri-Food Canada, language has also been included in the 2020 Canada-U.S.-Mexico Agreement (CUSMA) requiring that each party to the trade pact ensures any regulations on labeling “accord treatment no less favourable than that accorded to like goods of national origin.”

Any rules on labeling that any of the CUSMA free trade bloc members impose in the future also must “not create unnecessary obstacles to trade between the parties.”

All that said, separate legislation, which if passed would compel the U.S. Trade Representative’s office and USDA to come up with a new and WTO-compliant mandatory COOL system just for beef, has already been before Congress for months or more.

A bill introduced in the U.S. Senate in September 2021 by Senator John Thune of South Dakota was read twice in that chamber and referred to its agriculture, nutrition and forestry committee.

An identical bill introduced in the U.S. House of Representatives in late March last year by Texas Rep. Lance Gooden was referred at that time to the House ag committee, and to the House committee on ways and means. The ag committee last April 18 referred the bill to a House subcommittee on livestock and foreign agriculture. — Glacier FarmMedia Network

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That’s why increasing bipartisan talk on Capitol Hill to resurrect COOL (country-of-origin labelling) for U.S.-sold beef, has Canada’s meat sector on guard.

COOL is back in the headlines, seven years after a lengthy World Trade Organization (WTO) dispute saw the U.S. repeal mandatory COOL Dec. 18, 2015.

Why it matters: Canada’s cattle and hog industries say COOL cost billions in lost revenues between 2008 and 2015 and took years to get removed. The sector doesn’t want to have to fight that battle again.

COOL required American processors to include animal birth and slaughter location on labels and to therefore segregate non-American-born cattle and pigs. Canada and Mexico successfully argued that discriminated against their animals and added costs, contrary to trade rules.

The WTO authorized Canada to impose about $1.1 billion in retaliatory tariffs if the U.S. failed to terminate COOL.

The years-long fight eventually cost the Canadian Cattlemen’s Association and Canadian Pork Council close to $4 million and $1 million, respectively, in legal fees.

“To hear those discussions on COOL comeback is worrying,” Manitoba Pork Council general manager Cam Dahl said May 3. “I know right now the only term being talked about is beef, but I am hearing ‘beef’ and seeing ‘meat.’ I think, as livestock producers in Canada, we’re in the same boat on this and we need to take it very seriously. I am concerned. It’s something we need to be paying attention to and it’s something our government needs to be paying attention to.”

In addition to an attempted COOL revival, the Americans are fighting to get more access to Canada’s dairy market.

Back on the table

Tom Vilsack, U.S. President Joe Biden’s pick for agriculture secretary, brought COOL back into the limelight during his Senate confirmation hearing, Feb. 2, 2021.

“I’m happy to work with you and your staff on anything that would allow us to advance country-of-origin labelling,” he said during a back and forth with a Republican senator. “If there is a way to get WTO compliant, I would be more than happy to work with you, and look forward to that.

“I’m absolutely willing to listen to anybody and everybody who has an idea on how we can circumvent or get to a point where the WTO doesn’t slap it down, that creates retaliatory impacts on American agriculture.”

Last fall, the U.S. Senate introduced a bipartisan bill, S. 2716, to restore the word “beef” into labelling law under the U.S. Agricultural Marketing Act.

In March of this year, a similar bill, H.R. 7291, was introduced in the House of Representatives.

If enacted, it would give Vilsack and U.S. Trade Representative Katherine Tai up to 180 days to “determine a means of reinstating” mandatory COOL for beef in a way that’s “in compliance with all applicable rules of the World Trade Organization (WTO).”

Speaking at the North American Agricultural Journalists’ (NAAJ) meeting April 25, Vilsack acknowledged the WTO found in Canada’s favour on COOL. What’s being considered now is voluntary labelling for products of the United States, he said, adding that a survey will first see if consumers understand what “Product of U.S.A.” means.

Do consumers think it means everything connected to a pork chop or hamburger was done in the U.S.?

“We’re interested in knowing if individual consumers attach a value to that proposition,” Vilsack said. “In other words, are they interested in considering the possibility of paying a penny or a few more if they know the product is a product of the U.S.?”

Vilsack hopes survey results will be in by year’s end.

Consumers want to know where their food is from, Republican Glenn “GT” Thompson, the U.S. representative for Pennsylvania’s 15th congressional district and ranking member of the House agriculture committee, told the NAAJ meeting.

“And I don’t think there is anything in international, national or local law that prevents a producer from promoting where their meat or their milk or anything else comes from,” he said.

“Countries… have certain limitation rules that we have to live in, but if you’re a producer you take whatever marketing opportunity,” he said.

U.S. farmers are frustrated their products aren’t labelled, Republican Sen. John Boozman, the ranking member of the Senate agriculture committee, told the NAAJ meeting. He added, however, that labelling must be WTO compliant.

“I understand their (farmers’) concerns,” he said. “They want to make sure that their product is labelled accurately.”

From the other side of the political aisle, New Jersey Sen. Cory Booker, a Democrat and sponsor of S. 2716, said Americans ought to know where their food originates. His comments came during an April 26 Senate agriculture committee hearing on a bill to increase competition and price discovery among cattle packing plants.

“It is utter deception for American consumers that we don’t label products of the U.S.A. as Products of the U.S.A.,” he said. “You let Mexican cattle come into our country, be processed by these big multinational corporations as we label this as ‘Products of the United States of America.’ That is outrageous. That is lying to consumers. That is deceptive practices and it should end because it’s ultimately hurting American ranchers.”

Canadian response

Voluntary labelling is permitted under WTO rules, Dahl said.

“If it was something that was practical and demanded by consumers, we would be seeing more of it on store shelves, but we’re not because it is very costly,” he said. “That was our argument to the WTO — it was imposing significant restrictions and discriminating against Canada and Mexico. I think those costs are very real and that’s why you’re not seeing voluntary labelling adopted more than it is.”

Al Mussell, an agricultural economist with Agri-Food Economic Systems, is skeptical about voluntary labelling.

“It’s hard to see how this could achieve the objectives of the proponents of the bill and not be distorting,” he said. “The whole deal is to find a way to treat or position product of the U.S. better than product of somewhere else, including Canada. Fundamentally that violates GATT Article III, which deals with ‘like’ treatment. I am not sure how they engineer that (voluntary label).”

GATT (General Agreement on Tariffs and Trade) underpins many of the WTO’s rulings on international trade.

While COOL talk grows louder, Manitoba Beef Producers president Tyler Fulton said he’s relieved, since Canada has the right to retaliate with WTO-approved tariffs if a non-WTO-compliant COOL returns.

“It gives me comfort that there is no timeline for which our right to retaliate expires,” Fulton, also a farmer near Birtle, Man., said. “I think we are all better off if there is not conflict and we work together to ensure open and free trade of animals.”

The North American cattle, beef, hog and pork markets are integrated, he added.

“It is that open and free trade that allows for more efficiency allocation of available supplies, which at the end of the day makes our product more affordable to consumers,” he said.

Like Fulton, the Canadian Cattlemen’s Association (CCA) believes the WTO ruling, remains a deterrent.

“We continue to closely monitor any developments related to COOL,” said Fawn Jackson, director of CCA’s policy and international affairs. “We do remain concerned about any measures that may cause disruptions in the integrated North American meat industry…

“I think there is a large understanding of the value of trade between our two nations and the importance of that being able to continue.”

Warning signs

Some experts saw the possibility of COOL 2.0 before Vilsack’s return as agriculture secretary, a position he held during much of the Obama administration.

In a prescient paper published in December 2020, agricultural economists Ryan Cardwell of the University of Manitoba and William A. Kerr of the University of Saskatchewan wrote that candidate Biden’s “made in all of America” policy pledges could disrupt agri-food trade.

“There remains broad bipartisan support for resurrecting mandatory country-of-origin labelling (MCOOL) requirements for meat imports into the United States, which is the type of policy that a new administration could position under the ‘buy American’ banner,” the paper read. “Reviving MCOOL as a ‘buy American’ policy would be even more nakedly protectionist than the last time it was introduced, making such a move unlikely to hold up in a WTO dispute.”

But the paper also notes that it took more than seven years to get COOL repealed the first time, during which time Canadian exporters were injured.

“Further, the paralyzed state of dispute settlement at the WTO makes it unclear that future disputes will even be pursued,” the report said.

Mussell agrees.

“Without a functioning (WTO) appeals panel, the U.S. could potentially enact something, but it’s hard for me to see, particularly given the precedent and just the reality of GATT Article III, how it survives,” he said. “But then they (U.S.) could just turn around and appeal it to a body that doesn’t exist and just more or less carry on with it.”

Given all the other issues facing American legislators — high food prices, inflation and international food security — Mussell wonders if COOL might lose momentum.

Then again, he said, there’s not much political downside in the U.S. for supporting it.

“This is one of those weird issues where progressive Democrats and the Trump Republican types can agree,” he said. “Protectionism plays well with both audiences, and the dangerous place right now to be is in the middle.”

— With files from Alex Binkley, Dave Bedard and D.C. Fraser

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Rep. Lance Gooden, a Republican from Texas, and Rep. Ro Khanna, a Democrat from California, on Wednesday introduced H.R. 7291, proposing to restore the word “beef” into existing labeling law under the U.S. Agricultural Marketing Act.

The bill, if passed and enacted, would give U.S. Trade Representative Katherine Tai and U.S. Agriculture Secretary Tom Vilsack up to 180 days to “determine a means of reinstating” mandatory COOL for beef in a way that’s “in compliance with all applicable rules of the World Trade Organization (WTO).”

Tai and Vilsack would have up to a year from the date when the bill is enacted to “implement the means” to do so.

“American cattle ranchers are being undercut by foreign competition because current labeling standards allow imported beef to be marked as made in the United States if it is only packaged here,” Gooden said in a release Wednesday. “Our trade policies should promote American-made beef and put the hard-working cattle ranchers in the United States first.”

“It is critical that American consumers are able to make informed decisions about the meat they buy,” Khanna said in the same release. “Consumers should be able to know that they are truly supporting American farmers and ranchers from labels at the store.”

Groups including the U.S. Cattlemen’s Association and R-CALF USA also stated their support for the bill in Gooden’s release on Wednesday.

After its introduction Wednesday in the House of Representatives, the bill was referred to both the House agriculture committee and the House Ways and Means committee.

A nearly identical bipartisan bill, S. 2716, was introduced last fall in the U.S. Senate by Sen. John Thune, a Republican from South Dakota, and Sen. Cory Booker, a Democrat from New Jersey, among others.

That bill was introduced Sept. 13, read twice and referred that day to the Senate committee on agriculture, nutrition, and forestry and has yet to return.

Both of the bills specify restoring COOL for beef must be WTO-compliant, because beef was pulled from the relevant labeling legislation in 2015 after the WTO ruled that COOL violated the United States’ international trade obligations.

COOL was first developed during the Clinton administration, passed near the end of the George W. Bush administration in 2008 and implemented during the Obama administration in 2009. It imposed mandatory origin labels for beef, pork, lamb, chicken and goat meat and certain other perishable commodities where sold at retail in the U.S.

Canada and Mexico responded by challenging COOL at the WTO and in U.S. courts, because the COOL rules — as applied by Vilsack as the Obama administration’s ag secretary — called for U.S. processors of meat from imported animals to provide labels that detailed where the specific animals involved in a given package of meat were born, raised and slaughtered.

The costs involved in segregating animals and production lines to follow that label law prompted some U.S. packers and processors to restrict or halt their imports or cut the prices they paid for Canadian cattle and hogs. Some estimates pegged Canadian cattle and hog producers’ losses to reduced prices and lost sales at over $8 billion.

After the WTO’s 2015 ruling against COOL, the Obama administration repealed the label rules on beef and pork rather than face retaliatory tariffs from Canada and Mexico on U.S. goods.

Since then, according to Agriculture and Agri-Food Canada, language has also been included in the 2020 Canada-U.S.-Mexico Agreement (CUSMA) to require that each party ensures any regulations on labeling “accord treatment no less favourable than that accorded to like goods of national origin.”

Any rules on labeling that any of the CUSMA free trade bloc members impose in the future also must “not create unnecessary obstacles to trade between the parties.” — Glacier FarmMedia Network

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“It’s still hugely on our radar,” said Alberta Beef Producers chair Melanie Wowk. “When COOL was first instituted in 2003, it was costing us about $600 million a year, so I think you could say it strikes fear into the producers… ”

But six years ago, the World Trade Organization (WTO) ruled it was discriminatory and said Canada could impose retaliatory tariffs of $1.1 billion if the U.S. continued to demand mandatory country-of-origin labelling for beef and pork. Washington then repealed its labelling law, a move hailed by larger U.S. cattle organizations such as the National Cattlemen’s Beef Association, which said it hurt ranchers on both sides of the border.

But the fight rages on, with groups like R-CALF USA trying to bring back COOL, an effort that got some mild encouragement from Tom Vilsack when he was confirmed as U.S. agriculture secretary.

“I am absolutely willing to listen to anybody and everybody who’s got an idea about how we can circumvent or get to a point where the WTO doesn’t necessarily slap it down, creating retaliatory impacts on American agriculture,” said Vilsack, who held the same post in former president Barack Obama’s administration.

But while Canadian beef industry officials are keeping a close eye on these rumblings from south of the border, so far, they don’t see anything to worry about.

“It’s something that we work on in partnership with our counterparts in the U.S., and the conversations down there have been reflective of the fact that if country-of-origin labelling were to come back, it would have to be WTO compliant,” said Fawn Jackson, director of policy and international affairs for the Canadian Cattlemen’s Association.

Despite that, the conversation around mandatory COOL seems to re-emerge every few years. That is, in part, because country-of-origin labelling doesn’t seem so bad until you dig a little deeper.

“Consumers want to know more about their food, and perhaps this is a way to do that,” said Jackson. “But when you really dig into the complexities of COOL, you really understand that the implications that mandatory labelling would have would be significantly negative for North American farmers and ranchers.”

That’s because it requires American and Canadian cattle be segregated at processing plants with lots of followup paperwork. (The American Meat Institute pegged that cost at $2.5 billion annually.) When COOL was in force, processors opted to buy American cattle instead, making it harder for some small U.S. packers to source cattle and pushing down prices here.

“Half of our cattle goes south, and when that happened, it really reduced the amount of packer capacity for Canadian cattle,” said Wowk, who farms near Beauvallon.

“Prior to 2003, there were 16 processors in the U.S. that were accepting Canadian cattle five to six days a week. When COOL came in, that dropped down to just six processors, and five of them would only take Canadian cattle once a week.

“So our numbers dropped significantly, which meant our exports dropped, and it ended up costing us a lot of money.”

If the fight were to resume, it would be waged by the cattlemen’s association but funded by provincial checkoffs.

“It cost us close to $4 million in legal fees for this COOL fight that we won in 2015,” said Wowk.

But Jackson doesn’t anticipate a repeat.

“I think it’s well understood that Canada won the WTO case and that we’ve retained our retaliation rights, so I’m hopeful that we won’t have to walk down that road again,” she said. “But the impact was significant when it was in place, so we’ll continue to monitor it and have discussions to avoid that.”

That said, building more awareness of the benefits of international trade is needed, especially in a post-pandemic, shop-local world.

“We need to make sure that it’s not something only Canadians are aware of, but everyone around the globe, particularly post-COVID-19,” Jackson said. “There was this interest in looking at local food systems, but we really have to remember that there’s benefits to having a mix of local and international trade.”

But as a cattle producer, Wowk isn’t as convinced that mandatory country-of-origin labelling will stay on the shelf where it belongs.

“Never say never,” she said. “The U.S. is a big, powerful country with a lot of money and a lot of backing. We’re a smaller country. We don’t have the power that they do. We depend on them a lot for trade.

“COOL is making a lot of noise in the U.S. right now. If somehow, some way, they are able to get around the WTO ruling, it’s going to hit us hard again.”

Jennifer Blair is a reporter with the Alberta Farmer Express. Her article appeared in the June 28, 2021 issue.

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Tom Vilsack, during his Feb. 2 confirmation hearing of the Senate Agricultural Committee, confirmed he is open to reintroducing COOL laws – if they comply with World Trade Organization (WTO) standards.

COOL refers to laws requiring retailers to identify the country of origin for specific commodities.

“I’m happy to work with you and your staff on anything that would allow us to advance country-of-origin labelling,” Vilsack said during a back-and-forth with a Republican senator. “If there is a way to get WTO compliant, I would be more than happy to work with you, and look forward to that.”

Not long after Obama was first elected in 2008, mandatory COOL was brought in by the USDA. By 2015 it was struck down by the WTO, with Mexico and Canada successfully arguing the policy put cattle and pig producers in those countries at a disadvantage.

According to the WTO’s ruling at that time, Canada would be able to put in retaliatory tariffs against the United States if similar COOL requirements are brought in under President Joe Biden; but Vilsack made clear he is cautious of the WTO’s previous decision.

The WTO’s dispute settlement process has been ineffective ever since Donald Trump refused to appoint someone to a vacant adjudicator position, leaving the body incapable of rendering decisions.

Some countries, including Canada, have found temporary work-arounds to settle disputes; but the potential reintroduction of controversial COOL laws in the U.S. would no doubt reinvigorate efforts by Canada, and others, to ensure the dispute resolution body is working effectively.

Biden’s administration has created cautious optimism the United States will become a more rules-based, multilateral trading nation with respect for international institutions like the WTO.

But clearly Vilsack has not yet ruled out bringing back the controversial COOL laws.

“I’m absolutely willing to listen to anybody and everybody who has an idea on 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 said. “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.”

During his hearing, he made clear getting into such a situation is not his intention, telling one senator he would not be introducing the same COOL laws that were in place four years ago.

While Vilsack’s comments about COOL understandably garnered attention in Canada, most of his cordial confirmation hearing focused on other issues.

The longtime Biden supporter made clear he shares the president’s vision for addressing climate change, telling senators he will harness the USDA’s “expertise in science and conservation to work with farmers, ranchers and forest owners to create new sources of income tied to their good climate practices.”

Vilsack, who has been serving as president of the US Dairy Export Council since 2017, appeared to go out of his way during his testimony to encourage lawmakers to work with farmers on how best to create a carbon market that would benefit producers.

Lawmakers from both sides of the aisle unanimously confirmed Vilsack – Republicans and Democrats spoke glowingly of him – and a similar fate is expected after his Senate confirmation hearing.

His appointment is not without criticism, however.

Organizations representing Black farmers, and some civil rights groups, charge Vilsack failed to get rid of systemic racial discrimination taking place within the USDA. Early in his opening remarks, he addressed that criticism.

“I will take bold action and work with this committee to address discrimination in all its forms across USDA agencies, offices and programs. I will ensure all programming is equitable and work to root out generations of systemic racism that disproportionately affects Black, Indigenous and People of Colour,” he said. “I will build the most diverse team in the department’s history, one that looks like America, and will extend that commitment across all USDA agencies and offices.”

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First let’s go to the beef import numbers, noting the major country sources of U.S. beef imports. In 2015, the U.S. imported $9.1 billion worth of beef from all countries. Of that number, $7 billion came from three countries with which we have a free trade agreement (FTA), Australia ($2.6 billion), Canada ($2.5 billion), and Mexico ($1.9 billion).

Live beef accounts for $2.2 billion of that total. Canada sent $1.3 billion worth of live cattle across our northern border while Mexico shipped $0.8 billion in from the south.

In 2015, the U.S. imported $2.8 billion in fresh and chilled beef. Canada exported $1 billion of that fresh or chilled beef to the U.S. followed by Mexico ($0.9 billion) and Australia ($0.7 billion).

Frozen beef accounted for $3.4 billion of the U.S. imports of beef in 2015. Australia supplied $1.7 billion of that while New Zealand provided $1.1 billion. Nine other countries provided the rest with Uruguay accounting for $194 million and Nicaragua sending in $132 million in frozen beef.

U.S. beef imports increased from $3.2 billion in 1992 to $5.7 billion in 2013, an average of $113 million a year. In 2014 and 2015, beef imports increased by $3.4 billion or $1.7 billion a year.

Australia took the lion’s share or $1.5 billion of the $3.4 billion two-year increase. Mexico accounted for $850 million of that increase and Canada $400 million. The countries with whom the U.S. does not have an (FTA) were responsible for $674 million of the increase in beef imports from 2013 to 2015, of which New Zealand accounted for $382 million.

So why have imports surged these last few years? The increase has occurred within the context of the dispute Canada and Mexico had filed with the World Trade Organization (WTO) over the U.S. country-of-origin labelling (COOL) laws. COOL was also opposed by the U.S. meat-packing industry, which argued that it would be very costly to implement.

In May 2013, the U.S. had amended the COOL regulations in response to an adverse ruling by the WTO. The new regulations included changes, which Canada argued were more onerous than the earlier regulations. In March 2014, the WTO established a compliance panel to review the matter and many in the meat-packing industry expected the ruling to go against the U.S.

With COOL nearly in the rear-view mirror, one explanation, or least contributing factor, for the surge in U.S. beef imports could be that the packers felt free to import beef from the least expensive source without fear that increased imports would undermine their arguments against COOL.

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