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COOL reform needed to avoid WTO retaliation

The COOL Reform Coalition, of which the National Corn Growers Association is a member, asks farmers to join them in respectfully urging Congress to authorize and directing the Secretary of Agriculture to immediately suspend the Mandatory Country of Origin Labeling regulations for meat upon a final WTO adjudication of non-compliance with international trade obligations.

Such a congressional action would neither pre-judge the pending WTO litigation on this matter nor allow an on-going period of knowing violation of international trade obligations.

Composed of a diverse group of associations and companies, the COOL Reform Coalition represents U.S. food, agriculture and manufacturing industries, advocating for U.S. compliance with WTO obligations. Mandatory Country of Origin Labeling rules require most retailers to provide country of origin labeling for fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng, meat and poultry. The rules are required by the 2002 farm bill, as amended by the 2009 farm bill.

U.S. corn farmers have a vested interest, as corn products are included on the retaliatory list already outlined by Canada and will likely be included in any list produced by Mexico. Inclusion in the retaliatory lists has the potential to impact trade demand, thus harming the economic well-being of the U.S. corn industry.

Less than one year after the COOL rules took effect, both Canada and Mexico challenged the rules in the World Trade Organization, arguing that COOL has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market.

On June 29, 2012, the WTO Dispute Settlement Body adopted its Appellate Body’s holding that COOL rules violated the WTO Technical Barriers to Trade Agreement because they treat imported Canadian cattle and hogs and imported Mexican cattle less favorably than domestic livestock.

A WTO Arbitrator set a deadline of May 23, 2013, for the U.S. Department of Agriculture to correct its regulations. On that date, USDA published its revised rule. Unfortunately, government officials of both Canada and Mexico stated that the revisions were inadequate.

On September 25, 2013, Canada and Mexico requested the establishment of a compliance panel to determine whether the revised rule is WTO compliant. Should the compliance panel find that the revised rule is noncompliant, both nations indicated they would seek authorization from WTO to retaliate against U.S. exported goods. The WTO is expected to make the decision public in September 2014.

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