Washington Insider-- Tuesday

By DTN's Washington Insider

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

WTO Okays $1.01 Billion in Tariffs on US Goods for COOL

The World Trade Organization on Monday authorized retaliatory tariffs that could hit more than $1 billion worth of U.S. goods as soon as this month if Congress does not repeal the Agriculture Department’s contentious meat labeling regulations. The WTO ruled that Canada and Mexico can tax a wide variety of U.S. exports to cover costs they have incurred over years of implementing the so called country-of-origin labeling (COOL) rule.

Canadian Trade Minister Chrystia Freeland and Agriculture Minister Lawrence MacAulay issued a statement on the topic: “Today, the WTO arbitrator ruled that Canada can impose retaliatory surtaxes on $1.054 billion (Canadian) of U.S. exports to Canada as a result of the economic harm caused by the U.S. COOL policy, once final WTO authorization is obtained. The U.S. cannot appeal the ruling,”

Freeland and MacAulay said. “If the U.S. Senate does not take immediate action to repeal COOL for beef and pork, Canada will quickly take steps to retaliate,” they said. “Canada continues to work with our partners in the United States, and in the U.S. Senate, to urge the full repeal of the discriminatory COOL policy for beef and pork,” they said.

The Obama administration also responded: “We are disappointed with this decision and its potential impact on trade among vital North American partners,” said Tim Reif, general counsel for the Office of the U.S. Trade Representative. “We will continue to consult with members of Congress as they consider options to replace the current COOL law and additional next steps.”

According to Iowa State University economist Dermot Hayes, the average U.S. pork producer currently is losing money on each hog marketed, and retaliation from Canada and Mexico against U.S. pork would exacerbate those losses.

The Senate has debated mandatory COOL for nearly three decades, Roberts said, noting that he has opposed mandatory COOL from its inception. During the 2014 Farm Bill negotiations, Senator Roberts pushed for repeal. In June 2015, the Senate Agriculture Committee held a hearing on COOL and trade retaliation. Chairman Roberts has also spoke on the Senate floor regarding COOL retaliation and introduced legislation to repeal COOL and prevent retaliation.

Senate Ag panel members who have been fighting Chairman Roberts on this issue, including Sens. Stabenow, D-Mich., Hoeven, R-ND, Thune, R-SD, and Grassley, R-Iowa, are now being blamed by some livestock producers and other business stakeholders for dragging their feet on this issue and upping the odds of retaliation being implemented.

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European Commission Approves GMO Corn Import Licenses Despite Opposition

The European Commission has granted import licenses for two biotech corn varieties, including Monsanto’s glyphosate-tolerant NK603xT25, which a European Parliament committee had wanted not to be approved.

The two varieties – NK603xT25 and another Monsanto maize variety, MON87427 – were authorized for import into the EU on Dec. 4, destined for use as animal feed in the bloc. The EU executive adopted its draft decisions on the two corn varieties after the habitual "no opinion" verdict by member state governments in both cases.

Both corn products had received positive safety assessments by the EU Food Safety Authority (EFSA), which deemed them as safe as their conventional non-biotech counterparts. The import licenses are valid for 10 years, as with all of the EU’s biotech licenses.

However, the Parliament’s environment, public health and food safety committee last week called on the Commission not to authorize NK603xT25 or any other biotech variety, arguing that the EU’s authorization process is flawed and must be improved.

The committee also specifically opposed Monsanto’s glyphosate-tolerant NK603 x T25 because the International Agency for Research on Cancer (IARC) recently classified glyphosate as “probably carcinogenic” to humans.

The committee resolution now goes to a wider Parliament plenary vote. Even if adopted by the plenary, the resolution would not force the Commission to act – only to take it into account.

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Washington Insider: New Electronic Food Labels Proposed

The Grocery Manufacturers Association recently unveiled a new technology initiative that leading food, beverage and consumer products companies hope will allow consumers “easy and instantaneous access to detailed information about products” through QR, Quick Response codes, on packages or special web sites. This is, of course, a big economic deal, since the food, beverage and consumer packaged goods industry in the United States generates sales of $2.1 trillion annually, employs 14 million workers and contributes $1 trillion in added value to the economy every year, GMA says.

Now GMA is reporting that more than 30 major companies are already committed to participate in a “transparency initiative” and it expects more to join in the near future.

The proposal would provide consumers additional details about products through a bar code scan or through a “landing page” with information on ingredients and other attributes of a very wide range of products. It is designed to either provide immediate access or to allow questions about ingredients or products “in just one or two clicks.”

Pamela Bailey, president and CEO of the Grocery Manufacturers Association told the press “SmartLabel” technology will change how people shop and will help them find answers to questions about products “when they want that information.”

SmartLabel is expected to cover “thousands of products and hundreds of attributes.” These are designed for foods, beverage, personal care, household and pet care products. And, they are planned to include “hundreds of attributes including nutrition, ingredients, allergens, third-party certifications, social compliance programs, usage instructions, advisories and safe handling instructions along with company/brand information.”

A consulting group that surveyed consumers about the technology, Benenson Strategy Group, reported that 75% of consumers they surveyed said they would be likely to use the technology.

The information can be found in several ways: by scanning a QR code on the package, using a web search such as Google, Yahoo or Bing, going to a participating company’s web site, or eventually through an app.

Several participating retailers have said that they will help shoppers who lack smartphones through their customer service desk in stores. Both online and brick and mortar stores are exploring ways to make the electronic information more accessible to their customers such as by posting the SmartLabel™ link on their page or through customer service desks.

Some participating companies are expected to offer products with the new QR codes late this year and early in 2016, with projections of nearly 30,000 products labeled by the end of 2017. GMA says more than 80% of the consumer items could be labeled within five years.

“As more and more consumers are looking for responsible and sustainable brands, SmartLabel can link them to information about how a brand integrates sustainability into its products’ ingredients and lifecycle,” said Kees Kruythoff, President of Unilever North America, a leading marketer of U.S. personal care and food brands. “SmartLabel is an important tool for brands to provide additional product information, helping build trust with consumers who are increasingly mobile and online.”

So, will SmartLabels end the biotech labeling wars? Probably not. For example, advocates of mandatory labels likely will try to insist that producers use labels the advocates design while the producers prefer their own. However, GMA says that the food companies are projecting that, by the end of 2017, they will disclose via SmartLabel whether 20,000 food products do, may or do not contain ingredients sourced from genetically engineered crops, a number that could triple “once a uniform national standard is set for GMOs.”

So, GMA and a wide range of agriculture and business groups are continuing to urge Congress to pass legislation setting a uniform national standard for labeling to supersede a patchwork of state labeling mandates that vary from state to state. That, of course, makes food advocates extremely suspicious.

In the meantime, critics of the new technology are worrying publicly about whether some customers without phones will be excluded from the new information or will find them too cumbersome to use.

It seems likely that the label wars will continue unabated and will focus first on whether uniform, standard labels can be designed along with what those labels, if they are considered, should say. Certainly, the triad of “may contain; do contain; or do not contain ingredients from biotech crops will not please everyone so those battles may well intensify in the future, Washington Insider believes.

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(GH/CZ)

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