John Block Reports from Washington

Hello everybody out there in farm country. This radio commentary is brought to you by Monsanto, and John Deere. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.

And now for today’s commentary—

Turn back the clock to year 2002 and, that year, the farm bill added COOL (country of origin labeling) for meat. That has been a problem for the last 12 years. Consumer groups argue that they have a right to know where their meat comes from and where it has been. Mexico and Canada see the requirement as a clear effort to restrict trade and the World Trade Organization says that COOL violates WTO trade rules.

Two years ago, the WTO found that the U.S. COOL rule for meat is discriminatory against Canadian and Mexican livestock. Not to be deterred, USDA developed new COOL requirements for meat. Canada and Mexico quickly turned to the WTO and challenged the new USDA rule.

The WTO dispute settlement panel has issued a confidential report. The Wall Street Journal writes that the U.S. has lost. Canada and Mexico win. I’m not surprised. COOL is not fair to Canada and Mexico – two of our best trading partners. The U.S. has been a leader in ag trade, a leader in establishing the WTO, a leader in developing the North American Free Trade Agreement. We need to comply with our trade obligations.

When the official ruling is released, which should be this fall, and WTO finds the U.S. in violation of our trade obligations, the Secretary of Agriculture should immediately rescind the COOL rule for meat. Congress must then move quickly to fix the underlying statute. That’s the way it should end.

However, the U.S. could appeal the WTO ruling. Then, Canada and Mexico could retaliate against a broad range of U.S. products. We could lose billions of dollars in exports. A trade war with our closest neighbors would have a devastating economic impact. Country of origin labeling sounds simple, but it is not. Example – calves raised in the U.S. – sold to someone in Canada where they are fed until ready for market. They are then shipped back into the U.S. for slaughter. They have to be processed separately from other cattle that didn’t take the same route. Our processors can’t afford to separate their animals in all kinds of different groups to ensure accurate COOL. It’s crazy. It’s time to get this dispute behind us.

That’s it for this week. Until next week, I am John Block in Washington, D.C.