The Senate Committee on Agriculture, Nutrition and Forestry held a hearing yesterday on Country of Origin Labeling and Trade Retaliation. The chairman of the committee, Senator Pat Roberts (R KS), asked each of the six witnesses the question quoted above.  Mr. Jaret Moyer, the president of the Kansas Livestock Association, was one of those witnesses.  A portion of his response is the second of today's two featured quotes.  We shall return to Senator Roberts' questions and the replies he got in a moment.  First, and with apologies for going over old ground, here is some background.

In 2009, the U.S. Department of Agriculture began enforcing rules on country of origin labeling, which, in effect, forced U.S. livestock producers to keep animals imported from Canada and Mexico separate from those raised entirely in the United States.  "Born, raised, and slaughtered" is the magic phrase and legal requirement associated with those country-of-origin or COOL labeling requirements. 

Almost immediately, Canada and Mexico challenged the COOL regulations - and their 2013 revision - in the WTO, arguing that the U.S. rules were a non-tariff trade barrier that injured Canadian and Mexican producers of livestock.

On May 18, 2015, the WTO issued a fourth and final ruling against the United States on the issue, giving the green light to Canada and Mexico to raise tariffs against some amount of U.S. trade.  Canada and Mexico believe they should be able to go after roughly $3.2 billion in U.S. exports.  The U.S. has challenged that number.  Arbiters will decide the final number or numbers later this summer.   After that, Canada and Mexico will be free to raise tariffs on some level of U.S. exports into their markets.

On June 10, 2015, the House of Representatives passed H.R. 2939, the "Country of Origin Labeling Amendment Act of 2015" by a vote of 300 to 131.  Authored by Rep. Mike Conaway (R-TX), the chairman of the House Agriculture Committee, the bill would repeal the COOL requirements for beef, pork, and chicken.  The goal of Mr. Conaway's bill is to forestall retaliation, and it would.  Both Canada and Mexico have said as much.  They have also said that repeal is the only action the U.S. can take to get their fingers off the retaliatory trigger.  Could they be bluffing?  They might be. They might not be.  At the very least, they are strongly encouraging the Senate to follow the lead of the House.

On July 24, 2015, Senator Debbie Stabenow (D-MI),  the Ranking Member of the Senate Committee on Agriculture, Nutrition and Forestry, released a draft proposal for addressing the COOL challenge and, hopefully, avoiding retaliation.  A press release on Senator Stabenow's proposal describes it this way:

The question is, would Senator Stabenow's proposal be enough to keep Canada and Mexico from retaliating?  Some believe it would.  Others are skeptical, and certainty is not on offer.  Against that background, Chairman Roberts put his question to the panel.  Here is a more complete statement of it, together with further responses:

SENATOR ROBERTS:

One witness was willing to run that risk.   He was Leo McDonnell, the Owner/Operator of McDonnell Angus and Midland Bull Test, based in both Rhame, North Dakota, and Columbus, Montana.  He was testifying not only for himself but also on behalf of the United States Cattlemen's Association.

A supporter of the COOL system, Mr. McDonnell expressed doubts about just how big retaliation from Canada and Mexico might be.  We won't know that, he said, until the arbiters announce their decisions.  Still, he seemed to accept that some change may be necessary, and the change he proposed was a voluntary labeling program to replace the current one, a solution that is very much in line with what Senator Stabenow has proposed.    In his written testimony, he put it this way:

As for the other five, they each said they would be unwilling to risk retaliation and urged a straightforward repeal of the COOL labeling requirements for beef and pork.  Briefly:

Mr. Barry Carpenter of the North American Meat Institute:

Mr. Craig Hill of the Iowa Farm Bureau Federation for the American Farm Bureau Federation:

Mr. Jaret Moyer of the Kansas Livestock Association:

Mr. Jim Trezise of the New York Wine and Grape Foundation:

Mr. Chris Cuddy of Archer Daniels Midland Company:

How significant is it that five of the witnesses at yesterday's hearing favored a straightforward repeal of COOL and only one wanted to insert a new provision?   We don't know.  That balance may well reflect the preponderance of views about COOL in the American business community.  Or it may not.  As a general rule, it is mistake to read too much into the witness list at any one Congressional hearing.
More to the point, there are a number of Senators who would rather retain some elements of COOL than simply follow the House lead with a straightforward repeal.  Senator Amy Klobuchar (D-MN), Senator Heidi Heitkamp (D-ND), and Senator Robert Casey (D-PA) all seemed sympathetic to that view and to the proposal offered by the Committee's Ranking Member, Senator Debbie Stabenow (D-MI).

Senator Stabenow is concerned about the threat of retaliation.  At the outset of yesterday's hearing, she said, "Inaction by the Senate is not an option."  But, as we listened to her, Senator Stabenow also seemed to be warning that she will insist on something more than simple repeal.  "If we cannot come to an agreement," she said, "it will not be done quickly."

So we can expect further discussion of the voluntary labeling system that is the hallmark of Senator Stabenow's bill.  As background for those next conversations, three things are worth keeping in mind. The first is the fact that USDA, even now, has the power to institute a voluntary country of origin labeling program.  It could do that now  without any further legislation.  Mr. Carpenter of the North American Meat Institute made that point quite clearly. 

Second, those favoring putting a new voluntary system into law mentioned that Canada has such a system.  The question was asked, would Canada really object to the U.S. instituting a system which Canada itself employs?

Senator Roberts had an answer for that.  He said:

And, of course, the need to segregate to meet U.S. labeling requirements is the heart of the issue.

Finally, Senator Klobuchar asked the witnesses whether they thought Canada would really retaliate if the U.S. instituted a new voluntary system along with repeal of the mandatory one.  In his response, Mr. Moyer of the Kansas Livestock Association said: