By Ben Goad - 05/02/13 11:05 PM EDT
Agricultural groups and consumer advocates implored the Obama administration on Thursday to press forward with contentious meat labeling regulations despite the threat of damaging international trade sanctions.
A coalition of farmers and consumer rights groups called on the U.S. Department of Agriculture to finalize a strengthened set of rules requiring meat producers to attach country-of-origin labels (COOL) to their products.
At the same time, the group urged President Obama to address the long-simmering issue during his trip this week to Mexico, which, along with Canada, could impose retaliatory tariffs against the United States if no action is taken.
The U.S. labeling rules were enacted in 2009 as a means to give consumers more information about where their food comes from. As currently written, the regulations require grocers and other retailers to label meat products, fish, certain fruits, vegetables and nuts.
The American meatpacking industry never supported the rules, which required new livestock segregation, record keeping and packaging practices that cost packers as much as $500 million in the first year alone, they contend.
Mexico and Canada — the United States’ top two beef trading partners — also protested, saying the labels give American beef an unfair advantage in the marketplace. Late last year, the World Trade Organization (WTO) agreed and ordered the United States to remedy the problem by May 23, or else face potential sanctions.
Industry association groups seized on the WTO ruling as evidence the labeling regulations should be scrapped.
“Why are they doing something that is going to inflict economic damage on two of our biggest customers,” questioned Mark Dopp, general counsel and vice president of regulatory affairs for the American Meat Institute (AMI).
But consumer rights groups argue that the WTO ruling leaves room for the Obama administration to amend the current regulations. By their reading of the ruling, the WTO determined that the added benefit to consumers was not enough to warrant the costs to producers.
“They way you balance that is you make the information to consumers more precise, more accurate,” said Roger Johnson, president of the National Farmers Union, which supports the COOL regulations.
Earlier this month, the Department of Agriculture (USDA) unveiled draft changes to the regulations proposing just that. The USDA proposal would require separate labels telling consumers where livestock was born, raised and slaughtered.
Thus, meat now carrying a “product of the U.S.A." label would have to have labels reading, “Born, raised and slaughtered in the U.S.A.”
The consumer groups lauded the proposal, saying it follows international trends toward a more transparent food industry.
“It’s an incredibly logical thing,” offered Patty Lovera, assistant director of Food & Water Watch. “It’s a rare moment where we’re actually going to benefit from a change that’s happening because of a trade dispute.”
In formal comments, opponents said the proposed changes would almost certainly lead to the closure of several meatpacking houses unable or unwilling to pay additional costs associated with the additional requirements.
At the same time, they argue that the amended regulations are unlikely to satisfy the WTO.
“I’m reasonably confident that the Mexicans feel the same,” Dopp said.
Canadian Agriculture Minister Gerry Ritz arrived at that conclusion after meeting last month with U.S. Agriculture Secretary Tom VilsackThomas J. VilsackUSDA: Farm-to-school programs help schools serve healthier meals OVERNIGHT MONEY: House poised to pass debt-ceiling bill MORE in Washington. Upon his return to Canada, Ritz issued a statement threatening “extensive retaliatory measures,” if the United States does not achieve compliance by the WTO-mandated deadline.
Johnson said the foreign governments would only be able to pursue sanctions against the United States if the WTO concludes the proposed rule does not remedy the violation of international standards — and even then, imposing the tariffs would take many months.
A final decision on whether the Obama administration will move to finalize the rule has not been announced, and the Agriculture Department is reviewing more than 800 comments from groups and consumers on both sides of the debate.
Renewing their call for the rule’s approval, proponents said Obama’s visit Thursday to Mexico City would present an opportunity to resolve the dispute. The Mexican government has an incentive to listen, Wallach said.
“An inappropriate Mexican slap down of a USDA proposal that meets the WTO requirements would be unfortunate and not conducive to resolving our generally happy trade relationship,” she said.
During his visit with Mexican President Enrique Peña Nieto, Obama was expected to discuss trade, along with immigration and security issues. But it was far from certain that the meat labeling issue would be broached.
Late Thursday, the two leaders issued a joint statement about emphasizing their “commitment to the resolution of specific trade issues between their countries,” but did not elaborate.