The Senate Agriculture Committee held a hearing Thursday on how to handle the World Trade Organization decision that the U.S. country-of-origin labeling program for beef and pork discriminates against Canadian and Mexican producers, but the defenders of labeling and the critics are still in almost opposite corners about what should be done.

Senate Agriculture Committee Chairman Pat Roberts, R-Kan., said it is vital to act before Canada and Mexico impose retaliatory tariffs, which could come as early as August.

But Roberts also said afterward he does not have the votes in the Senate to pass the repeal bill that the House passed, Washington Trade Daily reported.

The House bill would repeal the beef and pork labeling that was the subject of the WTO case brought by Mexico and Canada, as well as the ground meat and chicken labeling programs, which were not.

Roberts said he hopes to hold a markup on a bill in July with passage before the August recess, WTD said.

Canada and Mexico have asked the WTO for permission to impose retaliatory tariffs on a total of $3.2 billion in U.S. goods and say that action could come as early as August, although that seems unlikely since the Obama administration has told the WTO it wants to go through the process of figuring out how much retaliation is warranted.

Senate Agriculture Committee ranking member Debbie Stabenow, D-Mich., has introduced a bill to make the labeling of beef and pork voluntary but still run by the government, and would put in place a “Product of the U.S.” label.

Agriculture Secretary Tom Vilsack has not yet commented on the practicality of that approach.

House Agriculture Committee Chairman Michael Conaway, R-Texas, has continued to call for repeal, and the COOL Reform Coalition, which includes manufacturers who fear trade retaliation as well as the meat industry, still favors repeal because that will assure no discrimination and no retaliation.

Conaway has said that a voluntary government program will still involve expensive record keeping and that any labeling program should be run by industry.

Both Roberts and Conaway have noted that Canadian Agriculture and Agri-Food Minister Gerry Ritz has repeatedly said, “For Canada, legislative repeal of COOL is the only approach that will achieve this end.”

In his opening statement, Roberts acknowledged that COOL is popular among some cattle and hog producers.

“I want to emphasize I understand completely the concerns of some members of this committee. I have encouraged alternatives to be brought forth,” Roberts said.

“But as chairman of this committee I must emphasize to my colleagues and all of agriculture that retaliation is fast approaching and the responsibility sits squarely on our shoulders.”

Roberts noted that Canada has threatened retaliation on products including beef, pork, cherries, ethanol, wine, orange juice, jewelry, mattresses and furniture.

“Mexico has yet to finalize their list, but we expect it to be just as damaging,” he said. “The U.S. economy cannot tolerate such economic injury.”

In her opening statement Thursday, Stabenow said, “COOL is a landmark law. It empowers consumers to know where their food comes from — and is supported by America’s family farmers and ranchers who proudly raise the world’s safest, most abundant, most affordable food. This partnership is big reason COOL has always enjoyed broad, bipartisan support in the Senate.”

But she added that the United States is “facing a very significant trade compliance issue that demands our full attention. The World Trade Organization has spoken decisively regarding COOL’s effects on the beef and pork trade with Canada and Mexico. Simply put, inaction from the Senate is not an option.”

But Stabenow also noted that the sides of the debate “have been dug in for a long time on this issue” and that “entrenchment has not produced a path forward.”

Stabenow said her proposed “Product of U.S.” label would be “very similar to the voluntary Canadian label” and that it will be a “WTO-consistent approach” that will find “a pathway forward between the United States and our neighbors to the north and south.”

She also noted that because Michigan borders Canada, “I know firsthand the vital importance of protecting our North American trade relationships.”

Most witnesses seek repeal

Representatives of the North American Meat Institute, the American Farm Bureau Federation, the Kansas Livestock Association, the New York Wine & Grape Federation and the Archer Daniels Midland Company all asked the committee to repeal COOL for beef and pork.

“Let’s be candid,” said North American Meat Institute President and CEO Barry Carpenter. “When the COOL debate began, the most vocal proponents of COOL for meat had a single objective: to block the importation of livestock from Canada and Mexico.”

“Despite the current arguments offered by COOL proponents, the law has never been about distinguishing meat products in the market by country-of-origin — the Federal Meat Inspection Act has always required the labeling of imported meat,” Carpenter said.

“COOL is simply a protectionist measure intended to exclude or diminish the presence of Canadian and Mexican livestock from the U.S. market. It is and always has been a non-tariff trade barrier. Anyone ignoring this fact is not a serious participant in this discussion.”

Craig Hill, president of the Iowa Farm Bureau Federation and speaking on behalf of the American Farm Bureau Federation, said Farm Bureau has supported labeling as long as it is WTO consistent, but that the organization now believes repeal is needed.

Jim Trezise of the New York Wine & Grape Federation said, “The wine industry worldwide is highly competitive, and extremely price sensitive.

“The potential tariff increase by the Canadian government would roughly double the price of American wines to Canadian consumers overnight, drying up our sales and opening the door to competing wine regions from throughout the world,” Trezise said.

“Even if the increased tariffs were later dropped, the shelf space and restaurant wine listings would be long gone, requiring years of effort and huge investment to regain them, if that is even possible,” he said.

“This would mean a huge surplus of American wine, which in turn would depress grape prices for farming families.”

Chris Cuddy of ADM said, “Retaliation would render our exports — from ethanol to soy protein isolates to corn syrup — completely uncompetitive.”

Leo McDonnell of the U.S. Cattlemen’s Association, a group that has advocated mandatory labeling, said that while he and his members still remain committed to COOL, “we recognize the pressures facing Congress.”

“Today, I come to you to propose a commonsense compromise,” McDonnell said.

“U.S. cattle producers want the integrity behind the ‘A’ label to remain intact. In no circumstance should a product not born, raised and harvested in the U.S. be granted a U.S. label,” he said. “Through a voluntary program, we ask that this label be maintained and not comingled with other product originating in Canada and Mexico.”

“Through a voluntary approach, only those packers willing would be subject to adhering to the policy behind the ‘A’ label,” he said.

National Farmers Union President Roger Johnson, another strong pro-labeling advocate, did not testify but said in a news release that his group endorses the Stabenow approach and that the rhetoric at the hearing calling for repeal was “overkill.”

“The ceaseless saber-rattling by Canada, threatening retaliation against the United States, is premature and overhyped because Canada has yet to make a credible base for real economic harm from COOL,” Johnson said.

He noted an Auburn University study that found damages to Canadian producers are much smaller than Canada has claimed.

Food & Water Watch did not testify, but said in a news release that it opposes the elimination of mandatory COOL by repealing the statute or by making labels voluntary.

“A voluntary labeling scheme that primarily allows meatpackers to choose whether or not to affix a ‘born and raised in America’ label would present nearly identical WTO problems as a mandatory label, but with few of the benefits,” the group said.

“The United States has been embroiled in a nearly two-decade WTO dispute over the voluntary ‘dolphin-safe tuna’ labels, so making COOL labels voluntary does not automatically eliminate trade disputes,” it noted.

• Barry Carpenter, CEO, North American Meat Institute, Washington
• Craig Hill, president, Iowa Farm Bureau Federation on behalf of American Farm Bureau Federation, Milo, Iowa
• Leo McDonnell, executive officer and director emeritus, United States Cattlemen’s Association, Rhame, N.D.
• Jaret Moyer, president, Kansas Livestock Association, Emporia, Kan.
• Jim Trezise, president, New York Wine & Grape Foundation, Canandaigua , N.Y.
• Chris Cuddy, senior vice president, Archer Daniels Midland Company, Decatur, Ill.