The United States Senate has stalled again on passing legislation to bring the country into world trade compliance with its Country of Origin Labelling regulations.
The World Trade Organization has ruled its regulations illegal and has granted Canada the right to impose $1.055 worth of tariff penalties on U.S. products and Mexico almost $800 million worth.
This time the Senate is stalling because it wants to wrap the COOL issue into an omnibus bill that includes farm-program funding, gun legislation and a federal law to regulate the labelling of GMOs (genetically-modified organisms) so the Vermont legislation which takes effect in July was be over-ruled.
Canada has waited years to achieve fairness on the COOL issue, fairness that would once again bring Canadian cattle and hog prices up to the level U.S. packers pay American farmers.
Because they were forced to label imported meat, they had to keep Canadian and Mexican cattle separate, not only for slaughter, but also throughout processing and packaging.
Because there were extra costs, they bid less for Canadian and Mexican cattle and hogs and, at home, packers realized their farmers couldn’t export, so they dropped their prices close to what the American packers were still willing to pay.
It cost Canadian hog farmers more than $1 billion a year and cattlemen hundreds of millions per year.
Unfortunately, it has taken so long to get resolution that some farmers who were living on the edge either quit or were forced out of business. COOL also created an opportunity for American farmers to expand production.
Prime Minister Justin Trudeau said he’s willing to be patient for a while, but said he will step in to impose tariffs to pressure the American politicians.
Gerry Ritz, who was agriculture minister and now is agriculture critic for the Conservatives, has been calling for immediate imposition of tariffs.
It’s not clear whether that would simply make the Republican Senators angry enough to continue stalling, or would generate enough political heat from their tariff-hit constituents to legislate an end to COOL.
The Democrats, led by Agriculture Secretary Tom Vilsack, are talking about keeping COOL, but making it voluntary instead of compulsory.
Canadian farm leaders say that’s unacceptable and say the only acceptable response is elimination of COOL.