U.S. bid to resurrect contentious beef labelling rules returns to Capitol Hill

October 29, 2021
U.S. bid to resurrect contentious beef labelling rules returns to Capitol Hill

A group of U.S. senators is aiming to bring back mandatory country-of-origin labelling rules for beef, six years after being repealed under the threat of $1-billion in trade sanctions from Canada.

Four U.S. senators — two Republican and two Democrat — recently introduced the American Beef Labeling Act, garnering praise from long-time backers who see the rules as helping struggling ranchers.

“We intend to get this passed as quickly as possible,” said Bill Bullard, chief executive of R-CALF USA, a cattle trade association representing about 5,500 farmers and ranchers across 44 states.

Opponents of the bill,  in Canada and the United States, regard the proposed legislation as a long shot but are nevertheless keeping close tabs due to the high stakes and unpredictability of politics inside the Beltway.

The annual value of Canadian exports of beef and live cattle to the U.S. is pegged at between $2.5 billion and $3 billion.

“We’re watching — you never know,” said Bob Lowe, president of the Canadian Cattlemen’s Association.

“It’s the world of politics, and sometimes there doesn’t need to be a reason.

The Canadian cattle industry pegs the value of its exports of beef and live cattle to the United States at between $2.5 billion and $3 billion annually. (Reid Southwick/CBC)

When the U.S. wielded mandatory country-of-origin labelling rules (MCOOL) last decade, it cost Canadian producers dearly and was blamed for sharp declines in livestock exports south of the border.

It set mandatory labelling for packaged steaks and other cuts of meat, requiring grocery stickers explaining where livestock was born, raised and slaughtered. Opponents saw the rules as protectionist.

Ultimately, it took the World Trade Organization, which ruled that the U.S. violated international trade law, and the threat of hefty sanctions for American lawmakers to repeal the regulations in 2015.

Now, a group of American senators aim to bring it back.

Sen. John Thune of South Dakota said their bill would require the U.S. Trade Representative to develop a WTO-compliant means of reinstating MCOOL for beef within one year of enactment.

The bill also proposes that if the trade representative fails to do so within a year of enactment, then MCOOL would automatically be reinstated for beef. 

“Transparency in labelling benefits both producers and consumers,” said Thune in a release.

“Unfortunately, the current beef labelling system in this country allows imported beef that is neither born nor raised in the United States, but simply finished here, to be labelled as a product of the USA.”

The bill, introduced last month, still faces a political labyrinth ahead of it, and has been referred to the Senate’s committee on agriculture, nutrition and forestry.

Bill Bullard is the CEO of R-CALF USA, an American cattle trade association representing 5,500 farmers and ranchers across 44 states. He supports MCOOL and believes it will soon make a return. (R-CALF USA)

Still, R-CALF’s Bullard is certain it will have success, adding “both sides of the aisle can see that the marketplace in the United States is fundamentally broken for the cattle and beef industries.” 

But the oldest and largest national association representing U.S. cattle producers continues to oppose MCOOL.

“I would say it’s a billion-dollar gamble,” said Kent Bacus,  a senior director at the National Cattlemen’s Beef Association.

“If we are unable to find a trade compliant solution, then we’re going to have to fight it out in the WTO. And meanwhile, Canada and Mexico will probably move forward with retaliation as they are entitled under the WTO decision.”

Bacus said the policy would hurt American producers as well, “because we export a lot of live cattle to Canada.”

Lowe of the Canadian Cattlemen’s Association said he doesn’t believe the bill will pass because of the retaliatory tariffs the U.S. would face from Canada under the WTO ruling.

When the U.S. wielded mandatory country-of-origin labelling rules last decade, it cost Canadian producers dearly and was blamed for sharp declines in livestock exports south of the border. (Jeff McIntosh/The Canadian Press)

“Someday, something probably will move forward, but we don’t think this [bill] is the one,” Lowe said.

A spokeswoman for Global Affairs Canada said Ottawa would oppose any new proposals from the U.S. to resurrect mandatory country-of-origin labelling for beef and pork.

“We expect the U.S. to continue abiding to this ruling and its WTO obligations,” Lama Khodr said in an email.

One trade expert said the issue is another reminder why it’s important to build relationships with state legislators who can also be allies on trade issues between the two countries.

“I hate to be worried about this stuff, but we’ve got to be on this like stink on you-know-what,” said Carlo Dade, director of the trade and investment centre at the Canada West Foundation.

“The easiest problem to solve is one that you prevent from becoming a problem. So even if this doesn’t go anywhere, the work to make sure it doesn’t go anywhere would pay dividends.”

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