Vilsack Interprets MCOOL and Wants 'Voluntary' Changes

February 17, 2009 06:00 PM

via a special arrangement with Informa Economics, Inc.

New USDA Secretary continues his activist agenda

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Although USDA is not officially altering the proposed final rule for implementation of mandatory country-of-origin labeling (MCOOL) for meat and meat products, USDA Secretary Tom Vilsack said Tuesday that he will ask U.S. meatpackers to voluntarily follow stricter guidelines for new package labels to directly specify the meat/product's country of origin. If the voluntary plan is not followed, the Obama administration will write new rules.

Clearer labels. The Associated Press reported that according to those on a telephone call with Vilsack on Tuesday, including Jean Halloran of Consumers Union and Patty Lovera of Food and Water Watch, Vilsack said he would like to see labels that would give consumers a clearer idea about the origin of the animal or food.

Vilsack also said the law should cover more foods, Halloran and Lovera said, according to the Associated Press account. Many foods that are defined as "processed" — roasted peanuts, for example, or cured bacon — are exempt from the law, but Vilsack proposed narrowing that definition. We are told a lot of the focus will be on produce – particularly bagged products. Lovera told the AP that said she was encouraged by the proposals, which Vilsack is expected to lay out in a letter to the meat industry today.

The Obama administration's changes could cause problems with the country's North American neighbors. Both Mexico and Canada have protested the labeling law in a complaint to the World Trade Organization (WTO), with Canada, at least for now, shelving its complaint after the Bush administration issued flexibility in its proposed rule. Obama is scheduled to visit Canada on Thursday.

Obama's trip to Canada forced Vilsack's interpretation/decision making. In an interview with CongressDaily on Tuesday, Vilsack said that the voluntary request to U.S. meatpackers was being made in preparation for President Obama's trip to Canada Thursday. CongressDaily reported that Vilsack said Obama expects to be asked about meat labeling. The U.S. would not be a "good friend" if Obama were to say nothing about the labeling issue and then impose a stricter regime, Vilsack explained.

Importantly, Vilsack said any decisions about the trade implications of the labeling program would be made by Obama himself. The Office of the U.S. Trade Representative "could come to the president and say this law is creating issues," Vilsack said. "But the president will decide whether to propose changes."

In an interesting development, Vilsack told CongressDaily that under his interpretation of the law, Congress believes "American consumers need to know and should know when something is an all-American product," and that the Bush administration rule did not carry out the law.

A move only a lawyer can come up with. Vilsack said he did not initiate a new round of rulemaking because he did not want "a vacuum that would be created by the process."

The Bush rule allowed meat processors to co-mingle ground meat that has been processed within 60 days, but Vilsack told CongressDaily that he has also asked the meat processors to reduce the number of days to 10.

Comments: Vilsack's “interpretation” of Congress' intent sets a precedent for this USDA – if groups want policy changes, they can now urge Vilsack to issue an interpretation. This reminds me somewhat of the criticism former President George Bush received from Democratic members of Congress when the president issued interpretative statements following his signing of legislation into law. I understand that Vilsack's approach on this matter brought spirited debate among some career people at USDA.

It will be interesting to see how Canada reacts to the latest developments on MCOOL. On Tuesday, Canada said it stands ready to revive a trade complaint against the U.S. should Washington reinstate country-of-origin meat labeling rules that Ottawa considers protectionist, Agriculture Minister Gerry Ritz said. "Should the Obama administration continue on with protectionism and country-of-origin labeling, we will then reignite our WTO challenge," Ritz said. Canada agreed to shelve its WTO complaint last month after the government of George Bush revised US rules to allow greater flexibility on labeling of meat. It remains to be seen whether Canada's position will change based on Vilsack's changes.

Meanwhile, Vilsack's mention of the USTR office is interesting because our sources say it was USTR officials in the Bush administration who urged the MCOOL flexibility that Vilsack now wants to alter via the “voluntary” request to meatpackers.

As for the reaction from U.S. meatpackers, they await the official delivery of Vilsack's letter. We understand the meatpackers will take a while to review the letter and the matter, with some sources suggesting Vilsack's “voluntary” approach may not be followed, and that it could take three to four months before that is known. If so, Vilsack said he would follow up with official rule changes.

Meatpackers were doing everything they could to follow the proposed rules and regulations. Many have already printed labels at some expense. One industry source told me, “This issue is over a small amount of Canadian cattle for direct slaughter in the U.S. because most of the Canadian cattle coming to the US are feeder cattle, finished in the US and slaughtered.”

Also, extending the rules to processed meats would significantly increase the cost for the industries involved. I wonder if Vilsack even asked about the economic impact of this potential change. The law of unintended consequences will follow -- interpretation notwithstanding.

While MCOOL supporters were privy to a conference call on the matter yesterday, and a few meatpackers, a general press conference on the matter previously scheduled for today was postponed to a later date.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


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