America’s meat industry and our trading partners engaged in a collective sigh of relief on Friday. Prior to embarking on his annual Christmas retreat to Hawaii, President Obama signed the 2016 Consolidated Appropriations Act into law. Tucked into the 2,009-page bill was a measure that repeals USDA’s special country-of-origin labeling (COOL) requirements for fresh and ground forms of beef and pork (Div. A, § 759). This measure finally closes the chapter on an unnecessary regulation that increased costs for consumers and antagonized our closest trading partners. It also moots the $1 billion in retaliatory tariffs that American industries would have faced after the World Trade Organization (WTO) held that mandatory COOL violated our treaty obligations.
In response to the enactment of this legislation, USDA announced on Friday that it would immediately suspend enforcement of COOL for pork and beef products. Also, the agency will revise its COOL regulations “as expeditiously as possible.” This means that meat plants will no longer need to segregate cattle or hogs by the country-of-origin classification for slaughter or processing. *[see update below] Nor will plants be required to apply separate labeling to packaging based on a source animal’s country of origin categorization.
Mandatory COOL provided an incentive to discriminate against beef and pork that was not born, raised, and slaughtered in the U.S. – Mexico and Canada’s chief complaint raised at the WTO. Removing this requirement will help to restore normal trading conditions with our neighbors and prevent the imposition of retaliatory tariffs, which could have substantially harmed a number of U.S. agriculture industries.
COOL opponents did not get everything that they wanted from the legislation. Mandatory COOL is still in place for chicken, lamb, and a number of other niche meat products. COOL requirements also remain in place for fresh and frozen fruits and vegetables. Congress only addressed the two commodities at the heart of the WTO dispute: beef and pork.
Beef and pork that is imported to the United States in its final form is still subject to U.S. Customs & Border Patrol regulations regarding country-of-origin markings. Furthermore, imported products are still subject to USDA Food Safety and Inspection Service inspections and enforcement. Also, Congress’ repeal of mandatory COOL will not prohibit the voluntary display of country-of-origin markings. However, Canada and Mexico have indicated that they will closely monitor voluntary COOL regimes to ensure that USDA does not incentivize discrimination against foreign-sourced beef and pork.
[UPDATE: On December 21, 2015, FSIS updated FSIS Directive 9530.1. Directive 9530.1 requires USDA inspectors to order packing plants to segregate Canadian cattle, sheep, and goats that are imported directly for slaughter. These livestock are to be held separately and slaughtered as a group. This directive is premised on USDA's obligation to monitor livestock for BSE].
John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA. John focuses his practice on agricultural and environmental law. He occasionally tweets at @DCAgLawyer. This column is not a substitute for legal advice.