Two weeks ago, I reported on a little-known trade conflict between the United States and Canada that could cost Michigan farmers nearly $700 million in retaliatory trade sanctions.
This involves a U.S. law known as COOL, for Country-of-Origin-Labeling. It took effect in 2008, and requires all meat to be labeled with its country of origin.
Canada says this has been devastating to their producers, because it has added costs to Canadian meat, helping make it non-competitive, and has played havoc with supply chains on both sides of the border.
Canadians also feel that as a fellow NAFTA country, its agricultural products should be treated as domestic by America.
They note that the U.S. Department of Agriculture has no concerns whatsoever about the safety of Canadian meat. They took their case to the World Trade Organization, or WTO, which ruled against the United States -- four times.
Now, Canada has announced that unless the COOL standards are repealed by summer’s end, they will impose retaliatory sanctions that will target $684 million dollars of Michigan agricultural exports to Canada every year.
Debbie Stabenow, Michigan’s senior senator, has been a key player here. She is the ranking Democrat on the Senate Agriculture Committee, and until January, was its chair.
Many Canadians blame her for COOL not being repealed. But late last week I talked to the senator, who on Wednesday offered a new bill she sees as a reasonable compromise. It would allow U.S. producers to voluntarily label meat “Product of the U.S.”
She told me, “I understand we can’t do mandatory labeling. We lost in the WTO. I get that. But voluntary labeling is perfectly acceptable – the Canadians themselves suggested earlier that’s exactly what we should do.”
Senator Stabenow showed me several quotes that seemed to back that up. Last summer, Canadian minister of agriculture Gerry Ritz said, “If you do a voluntary label, which we do in Canada under 'product of Canada,' you don’t have that trade sanctioned problem.”
And three years ago, while protesting COOL, Canada told the World Trade Organization, “voluntary labeling can provide a far more effective means to inform interested consumers.”
But when I asked Canadian officials whether Stabenow’s bill was a reasonable compromise, they said, "absolutely not."
Agriculture Minister Ritz, and Ed Fast, Canada’s international trade minister, released a statement denouncing her bill, saying it would continue to undermine trade “by continuing the segregation of and discrimination against Canadian cattle and hogs.” They added, “The only acceptable outcome remains for the United States to repeal COOL, or face $3 billion dollars in annual retaliation.”
So the clock is ticking. Senator Stabenow acknowledged these negotiations are “tough” but said she was confident that an agreement could be reached before sanctions kick in, which would presumably happen in September.
Meanwhile, current Senate Agriculture Chair Pat Roberts of Kansas indicated he felt it was time for the Senate to follow the House’s lead, completely repeal COOL, and discuss voluntary labeling programs afterwards.
“The fact is, retaliation is coming, and we need to protect the U.S. economy,” he said. However anyone sees this issue, the bottom line is clear.
These sanctions would be devastating to Michigan.
And I can’t help but remember the famous admonition, “First, do no harm.”
Jack Lessenberry is Michigan Radio's political analyst. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.
