Opening Statements

Remarks as prepared for delivery:

Good morning.

We have under consideration the bill, H.R. 2393.  This bill is narrowly drafted to eliminate the requirement for country of origin labeling for meat products from cattle and hogs for which the WTO ruled against the program.  We also eliminate the requirement for chicken, which faced high costs and little if any quantifiable benefits, and asked to have this mandate repealed.  No other products are affected.

At 10AM this past Monday morning, the World Trade Organization announced the fourth and final decision in the dispute concerning U.S. Country of Origin Labeling requirements.  After careful consideration of claims by our most important trading partners that our country of origin labeling program for meat is unavoidably discriminatory, the WTO has again found in favor of Canada and Mexico, rejecting U.S. arguments.

The Appellate Body rejected the US arguments against the panel's findings under Article 2.1 of the TBT Agreement.

The Appellate Body maintained the panel's conclusions that the amended COOL measure increases the record-keeping burden for imported livestock entailed by the original COOL measure.  The Appellate Body rejected US arguments that the panel's conclusions were based on “incorrect hypothetical” scenarios that were not based on actual, or the most common, trade situations.

The Appellate Body also maintained the panel's conclusions regarding the potential for labelling inaccuracy under the amended COOL measure and the exemptions prescribed by the amended measure.  The Appellate Body agreed with the panel that the recordkeeping and verification requirements of the amended COOL measure impose a disproportionate burden on producers and processors of livestock that cannot be explained by the need to provide origin information to consumers, and that the exemptions under the amended COOL measure support a conclusion that the detrimental impact of that measure on imported livestock does not stem exclusively from legitimate regulatory distinctions. In this regard, the panel had noted that between 57.7% and 66.7% of beef and between 83.5% and 84.1% of pork muscle cuts consumed in the US convey no consumer information on origin despite imposing an upstream recordkeeping burden on producers and processors that has a detrimental impact on competitive opportunities for imported livestock.

In regards to Article 2.2 of the TBT Agreement, the Appellate Body agreed with the Panel that an alternative measure providing less or less accurate information, but having significantly wider product coverage, could qualify as making a degree of contribution “equivalent” to that of the amended COOL measure. However, the Appellate Body also agreed with Canada and Mexico that the panel made several errors in concluding that the two countries failed to make a prima facie case that the amended COOL measure is more trade restrictive than necessary.  The panel incorrectly excluded two types of COOL labels from consideration when reaching its conclusion that the amended COOL measure makes a “considerable but necessarily partial” contribution to its objective of providing consumer information on origin.  The panel also erred in concluding it was unable to ascertain the gravity of the consequences of non-fulfilment of the amended COOL measure's objective; while making such an assessment is difficult, this should not relieve a panel from its duty to assess this factor, the Appellate Body said.

As a result, the Appellate Body reversed the panel's conclusion that Canada and Mexico failed to make a prima facie case that the amended COOL measure violated Article 2.2 of the TBT Agreement.    However, the Appellate Body made no finding as to whether the amended COOL measure is inconsistent with Article 2.2.

Finally, the Appellate Body upheld the panel's analysis under Article III:4 of GATT 1994.

This follows on the latest in a series of economic analysis from USDA demonstrating that this failed marketing program adds extraordinary costs with no – I repeat NO quantifiable benefits.

While I have long been a critic of COOL, I agreed upon assuming the chairmanship of this committee that I would wait until the WTO issued its final decision concerning the legality of COOL.  That has now occurred.  The United States has lost.

Some will say we need to keep waiting until retaliation has commenced before we consider our next step.  That is not something I am not willing to do.  We know we face retaliatory sanctions that could have effects in the billions of dollars.  Regardless of the amount, we cannot sit back and let American businesses be held hostage to the desires of a small minority who refuse to acknowledge that the battle is lost.

This Committee now has the responsibility to work quickly to ensure our economy and a broad spectrum of U.S. industries do not suffer the economic impacts of retaliation. 

This bill before us is a targeted response to the WTO decision that removes uncertainty, provides stability, and brings us back into compliance.  No other viable options have been proposed, and frankly, it is now too late in the process to begin discussions which rightfully should have begun when we first lost in the WTO in 2011.

I appreciate the hard work of Representatives Rouzer and Costa  on the subcommittee, and the work of so many other Members —on and off of the committee—in  supporting and cosponsoring this critical legislation.

I urge all Members to support this bill, and now yield to Ranking Member Peterson for his comments.