Congress to Repeal Meat-Label Rules to Stop $1 Billion Penalty

Congressional negotiators crafting a spending plan have agreed to a provision that would repeal country-of-origin labeling requirements for U.S. meat, an attempt to stave off $1 billion in Canadian and Mexican retaliation against American goods.

“I fully expect that it is in the omnibus. We have to get this done,” Senator Debbie Stabenow, the top Democrat on the Senate Agriculture Committee, said Tuesday. Language rolling back the labeling, known by the acronym COOL, isn’t final but would be part of a must-pass spending bill needed to keep the federal government operating.

Stabenow, who this summer proposed a voluntary program to replace the mandatory labels that rankled Mexico and Canada, didn’t specify the extent of the rollback. The House of Representatives in June approved a full repeal of the labels for pork, meat and chicken products.

The provisions are likely to be folded into an omnibus spending bill to fund the federal government and a separate tax package. Congressional leaders are on track to release the text of those bills late Tuesday, setting up votes in the House and Senate as soon as Thursday.

The WTO earlier this month gave Canada authority to seek approval for $780.9 million in retaliatory tariffs and Mexico $227.8 million across a wide range of industries, about a third of what the two nations sought. U.S. meatpackers including Tyson Foods Inc. have long sought a repeal, saying it needlessly complicates supply chains. Some rancher groups and consumer advocates have said the labels help consumers make better purchasing decisions.

American Beef

Losing access to markets in Canada and Mexico would cost American beef producers 10 cents a pound immediately, according to the U.S.-based National Cattlemen’s Beef Association.

Removing the label requirement would open the U.S. market for Canadian cattle producers, and U.S. meat plants will probably start accepting animals from Canada again, Dennis Laycraft, executive vice-president of the Canadian Cattlemen’s Association, said in an interview before the language was released.

“We went from every plant in the U.S. being willing to take the cattle to just a little more than a handful,” Laycraft said. “Our herd got smaller than it would have if COOL had not been in effect.”