North American Meat Institute President and CEO Barry Carpenter Thursday told Senate Agriculture Committee members that mandatory country of origin labeling must be repealed to avoid a possible $3 billion in annual penalties. Carpenter was one of six witnesses to testify in the hearing.

In opening remarks, Committee Chair Pat Roberts (R-KS) said, “Facts are stubborn things. Whether you support or oppose COOL, retaliation is coming.” Roberts said that the strain that mandatory COOL has put on the U.S. relationship with Canada and Mexico is “cause for concern.”

“The most vocal proponents of COOL for livestock have a single objective: to block the importation of livestock from our neighbors,” Carpenter said. “The law has never been about distinguishing meat products in the market, it is simply a protectionist measure intended to exclude Canadian and Mexican livestock from the U.S. market. It is and always has been a non-tariff trade barrier. Anyone ignoring this fact is not a serious participant in this discussion.”

The food industry was generally relieved when the World Trade Organization (WTO) ruled that the US Country of Origin Labeling (COOL) law does not comply with the WTO’s rules. The law had strong backing from consumer groups but the industry did not share that enthusiasm, mainly because it feared retaliation from Canada and Mexico. Now that the world trade body has spoken, the Grocery Manufacturers Association (GMA), a major trade group, was quick to urge Congress to repeal the law.

“This WTO ruling on COOL noncompliance could lead to billions in financial losses to the US food and agricultural sectors when Mexico and Canada impose WTO authorized retaliatory tariffs as early as this summer,” GMA said in a statement.

The association said Congress must act quickly because the US based targets of retaliatory tariffs from Canada and Mexico will begin to experience a substantial drop in export sales almost immediately due to supply chain disruptions.

 Carpenter stressed that repeal is the only option and that rewriting the law is simply not viable. “The US has run out of opportunities to try to “fix” COOL,” he said. “We should stop talking among ourselves to address COOL. We should be talking with the Canadian and Mexican governments – to do otherwise is a fool’s errand. And, I can tell you the Canadian and Mexican governments are very clear that repeal is the only solution.”