WASHINGTON – The U.S. court system upheld rules that require meatpackers to tell consumers where animals used in their products are born, raised and slaughtered.
But the World Trade Organization (WTO) may have killed the rules.
Last week’s WTO ruling against country of origin labeling — known as COOL — touched off a dicey debate. It concerns the balance between national sovereignty and international oversight in the era of global trade.
“We have an extragovernmental body making the rules,” said Rep. Tim Walz, D-Minn. “I was elected by the people of Minnesota. But we jumped faster for the WTO than we do for our constituents.”
While food labeling opponents, including Minnesota-based Cargill and Hormel, failed to convince a series of federal judges that COOL rules were unreasonably burdensome and infringed on companies’ free speech, the U.S. House is now expected to repeal the COOL rules because of the WTO decision.
The Senate may or may not follow suit. But the fight over whether the U.S. gives up too much control in the name of international sales seems destined to continue.
Even as President Obama moved closer to Senate approval last week for enhanced negotiating power in cutting new trade deals in Asia and Europe, questions lingered about what power the country sacrifices in participating. The WTO ruling, which allowed the Canadian and Mexican governments to financially penalize U.S. imports because of COOL, provided a powerful example of how outside organizations can undermine U.S. policy.
The rules requiring disclosure of where animals are born, raised and slaughtered date to 2011. U.S. food labeling advocates supported disclosure as a matter of consumer choice. But Mexico and Canada feared that consumers would shun their products and protested. After four years of complaints, rulings and appeals, the WTO issued a final decision last Monday, and food labeling opponents in Congress immediately moved to repeal the requirements.
Walz, along with Minnesota Democratic Reps. Collin Peterson and Rick Nolan, voted in the minority as the House Agriculture Committee repealed the COOL rules last week and sent a bill to the full House for consideration. All three called the reaction to the WTO premature.
In statements, Sens. Al Franken and Amy Klobuchar, both Democrats, expressed support for COOL, as did fellow Democratic Rep. Keith Ellison. Democratic Rep. Betty McCollum and Republican Reps. John Kline, Erik Paulsen and Tom Emmer did not respond to requests for comment.
“Country of origin labeling is important to many farmers and producers and to Americans who want to make informed decisions when buying food,” Franken said. “I don’t believe the WTO’s ruling against country of origin labeling is in the best interest of consumers, so I will be carefully examining the best path forward.”
Klobuchar said she is still reviewing the WTO action. “If any changes are needed to COOL in the wake of the WTO’s ruling,” she said, “we should find a way forward that will protect consumers and work for farmers, ranchers, and businesses.”
Some powerful Senate Republicans are ready to dump the labeling rules.
“I have long had concerns with COOL for meat,” Senate Agriculture Committee Chairman Pat Roberts, R-Kan., said in a statement. “If Congress doesn’t act swiftly, retaliation will wreak havoc on the U.S. economy.”
That may not be easy. When it comes to global trade issues and free trade deals, experts say it is hard to be parochial. International bodies will always make calls like the one made on COOL, said University of Minnesota economist Tim Kehoe. International bodies will also handle conflict resolution in the 12-country Trans-Pacific Partnership (TPP) and the 28-country Transatlantic Trade and Investment Partnership (TTIP) now on the table.
The “national decision” is whether to participate in international trade deals, said Kehoe, who consulted for Mexico on the 1994 North American Free Trade Agreement (NAFTA). Once you choose to play, individual countries try to negotiate terms that are in their best interests. But they inevitably cede power in order to reach a consensus with foreign trading partners.
The WTO ruling ended four years of complaints, rulings and appeals. Those who favored repeal pointed to the extended legal process as proof that the U.S. was out of options unless it was prepared to accept economic retaliation from Mexico and Canada that could cost U.S. exporters billions of dollars.
“Some will say we need to keep waiting until retaliation has commenced before we consider our next step,” House Agriculture Committee Chairman Mike Conaway, R-Texas, said as he pushed for COOL repeal. “That is not something I am willing to do.”
Questions of sovereignty did not come up last week as the committee voted 38-6 to end COOL. But afterward, Nolan told the Star Tribune that arbiters like the WTO have too much power and that “big multinational corporations” like Cargill are “dominating the public policy issues.”
“We are in the process of approving these trade agreements like TPP, and we continue to relinquish so many of the health, safety and wage benefits that helped build a great middle class,” Nolan said. “I think it’s a race to the bottom, and I’m determined to do everything I can to stop it.”
With 95 percent of the world’s untapped markets outside U.S. borders, it is a tall order.
Free market think tanks like the Heritage Foundation regard global trade deals not only as good, but necessary if the U.S. economy is to grow. The trade-off, said Heritage trade policy analyst Bryan Riley, is that “there will be cases where decisions under a trade agreement will go against you.”
The WTO “certainly put pressure on the U.S. to change [COOL],” he acknowledged. “But it’s important to remember that it is the same process that has forced China and other countries to change policies.”
Riley did not share the concerns of some food labeling advocates that the WTO had usurped the power of U.S. courts.
“The U.S. court system determines whether something is permissible under the U.S. Constitution,” he said. “It has nothing to do with our trade obligations.”