Recent developments in an ongoing trade dispute between the United States, Mexico, and Canada may have lasting consequences for grocery shoppers: the disappearance of food labels indicating the source of our meats.
The United States enacted a rule in 2009 requiring all grocery stores and supermarkets to label where their beef, pork, poultry, and goat products are sourced: where the livestock is born, raised, and slaughtered.
While the information is helpful for U.S. consumers who want to know where their food comes from, Canada and Mexico felt that the mandatory labeling discriminated against livestock imported from the two countries. They filed complaints with the World Trade Organization (WTO), alleging that the United States’s country-of-origin labeling (COOL) violated international trade rules.
The WTO agreed.
On Monday, after the United States made its fourth and last possible attempt to appeal the decision, the WTO again ruled against the labeling requirements.
Soon after, Canada announced it would seek permission from the WTO to impose trade sanctions against U.S. agricultural and non-agricultural exports—an act of retaliation against unfair U.S. policies.
To comply with WTO rules and avoid costly trade tariffs from Canada and Mexico, leading lawmakers in both houses of Congress have already expressed that they are willing to repeal the COOL labeling rules.
On Tuesday, the House Agriculture Committee chairman Rep. Mike Conaway (R-Texas) introduced a bill to do just that.
The news has U.S. consumer advocates worried that the disappearance of food labels will lead to lower food safety standards.
The Center for Food Safety’s senior policy analyst Jaydee Hanson said in a press statement Monday: “COOL is a tool for consumers who want to know how ‘local’ their food is. Moreover, it could allow the U.S. Department of Agriculture [USDA] to more quickly determine the origin of adulterated meat and food borne illnesses.”
Doing away with COOL will be a “grave blow” to consumers, the Center added.
Grocery shoppers may want the transparency in their food products, but they face formidable challenges against their case: even before WTO announced its final decision on Monday, major food companies and food industry associations had formed the COOL Reform Coalition. They had urged Congress to repeal COOL, arguing that the potential trade sanctions can cost the U.S. economy billions of dollars.
In addition, the USDA—which oversees compliance with the COOL rules—recently released a cost-analysis report concluding that implementing COOL actually does more damage than good to the U.S. economy.
They estimated that over a 10-year period since 2009, the costs of complying with the labeling rules will lead to losses of more than $8 billion for the U.S. beef industry and $1.3 billion for the pork industry.
The USDA explained that the costs are mostly incurred by meat producers, who have to keep track of information on the animal’s origins throughout each step of meat processing. Meanwhile, they found little evidence that the labels would actually increase consumer demand for U.S.-origin food products.
“Due to increases in the costs of production resulting from COOL implementation, however, the results of economic models indicate that consumers over the longer run face higher beef and pork prices and therefore purchase less beef and pork,” the USDA said in the study.