The saga over mandatory country of origin labeling (MCOOL) has had as many plot twists as a long-running TV series. It’s been both a drama and a cautionary tale. MCOOL became law only after it was attached to another piece of legislation in the dead of night, and this came after years of battling between supporters and opponents. Now the saga looks to be in its last episode.
MCOOL finally was implemented in 2009, but the battle continued. Canada, later joined by Mexico, initiated a complaint with the World Trade Organization (WTO). WTO subsequently ruled in June 2012 that the law is discriminatory against livestock from other countries and doesn’t meet the U.S.’s WTO trade obligations. Then, on Dec. 4, WTO gave the U.S. until May 23, 2013, to bring MCOOL into compliance with its WTO obligations.
Just prior to that, a new study revealed that MCOOL of meat products appears to have failed to deliver any of the benefits claimed by supporters. In fact, MCOOL has resulted in a net economic loss to the meat industry rather than any net gain, the study says. That’s because MCOOL added costs, but didn’t increase demand. Moreover, the beef and pork industries may have been more adversely impacted than chicken.
The key findings of the study, conducted by four agricultural economists, include:
- U.S. residents are largely unaware of MCOOL and don’t regularly use origin information when making purchase decisions.
- U.S. consumers prefer meat products with some origin label, but tend to be indifferent to specific provenance details on the label.
- There is no evidence of consumer beef, pork, or chicken demand responses to MCOOL’s implementation at retail level.
The three-part study included an online survey in April 2012 that was completed by 2,001 people, as well as in-person experiments with consumers in Texas grocery stores. The survey found that only 23% of respondents were aware of MCOOL, 12% incorrectly believed MCOOL was not a law, and nearly two-thirds didn’t know whether MCOOL is law.
Another Perspective: WTO Rules Against U.S. COOL Rule; Now What?
Similarly, the majority of in-person experiment participants didn’t know whether MCOOL was in place, despite standing near a retail meat counter. Furthermore, the majority of in-person participants also said they never look for origin information when shopping for fresh beef or pork products.
These findings appear to vindicate MCOOL’s opponents.
Another interesting finding was that consumers valued meat products labeled “Product of North America” about the same as “Product of U.S.” As the study’s authors point out, the two labels have vastly different implications in terms of trade and segregation costs, despite their similarity.
In fact, the enforced segregation, due to MCOOL, of livestock and meat from Canada and Mexico is at the heart of those countries’ WTO complaint. Canada says its producers have lost tens of millions of dollars.
A North America label might be one way to change the MCOOL law and bring the U.S. into WTO compliance. However, industry officials say a better solution would be to have the current “Product of the U.S.” label, one of four label options under the MCOOL law, apply to any meat products that come out of a federally inspected U.S. plant and thus carry the USDA mark of inspection. Their argument is that an origin label only applies to covered commodities, i.e., meat, so where animals originate from that supply is irrelevant.
Changing the “Product of the U.S.” label to include the above definition would require an amendment to the MCOOL statute. Such action is bound to meet with considerable opposition from MCOOL supporters. But the White House and Congress will be looking for a speedy solution. The WTO clock is ticking and they must act quickly to meet the deadline. If they do, the 19-year MCOOL saga might finally end this May.