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[Senate Hearing 114-152]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-152

                       COUNTRY OF ORIGIN LABELING
                         AND TRADE RETALIATION:
                          WHAT IS AT STAKE FOR
                      AMERICA'S FARMERS, RANCHERS,
                       BUSINESSES, AND CONSUMERS

=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 25, 2015

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Available via the World Wide Web: http://www.fdsys.gov/
                                    __________

                        U.S. GOVERNMENT PUBLISHING OFFICE 

96-180 PDF                     WASHINGTON : 2016 
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                          Washington, DC 20402-0001

           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

                     PAT ROBERTS, Kansas, Chairman

THAD COCHRAN, Mississippi            DEBBIE STABENOW, Michigan
MITCH McCONNELL, Kentucky            PATRICK J. LEAHY, Vermont
JOHN BOOZMAN, Arkansas               SHERROD BROWN, Ohio
JOHN HOEVEN, North Dakota            AMY KLOBUCHAR, Minnesota
DAVID PERDUE, Georgia                MICHAEL BENNET, Colorado
JONI ERNST, Iowa                     KIRSTEN GILLIBRAND, New York
THOM TILLIS, North Carolina          JOE DONNELLY, Indiana
BEN SASSE, Nebraska                  HEIDI HEITKAMP, North Dakota
CHARLES GRASSLEY, Iowa               ROBERT P. CASEY, Jr., Pennsylvania
JOHN THUNE, South Dakota

               Joel T. Leftwich, Majority Staff Director

                Anne C. Hazlett, Majority Chief Counsel

                    Jessica L. Williams, Chief Clerk

               Joseph A. Shultz, Minority Staff Director

              Jonathan J. Cordone, Minority Chief Counsel

                                  (ii)

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                            C O N T E N T S

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                                                                   Page

Hearing(s):

Country of Origin Labeling and Trade Retaliation: What is at 
  Stake for America's Farmers, Ranchers, Businesses, and 
  Consumers......................................................     1

                              ----------                              

                        Thursday, June 25, 2015
                    STATEMENTS PRESENTED BY SENATORS

Roberts, Hon. Pat, U.S. Senator from the State of Kansas, 
  Chairman, Committee on Agriculture, Nutrition, and Forestry....     2
Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan...     4

                               Witnesses

Carpenter, Barry, CEO, North American Meat Institute, Washington, 
  DC.............................................................     9
Hill, Craig, President, Iowa Farm Bureau Federation on behalf of 
  American Farm Bureau Federation, Milo, IA......................    10
McDonnell, Leo, Executive Officer and Director Emeritus for the 
  United States Cattlemen's Association, Rhame, ND...............    12
Moyer, Jaret, President, Kansas Livestock Association, Emporia, 
  KS.............................................................    14
Trezise, Jim, President, New York Wine & Grape Foundation, 
  Canandaigua, NY................................................    15
Cuddy, Chris, Senior Vice President and President of ADM's Corn 
  Processing Business Unit, Archer Daniels Midland Company, 
  Decatur, IL....................................................    17
                              ----------                              

                                APPENDIX

Prepared Statements:
    Grassley, Hon. Charles.......................................    40
    Leahy, Hon. Patrick J........................................    41
    Carpenter, Barry.............................................    42
    Cuddy, Chris.................................................    47
    Hill, Craig..................................................    49
    McDonnell, Leo...............................................    53
    Moyer, Jaret.................................................    68
    Trezise, Jim.................................................    72
Document(s) Submitted for the Record:
Hon. Pat Roberts:
    Minister of Agriculture and Agri-Food, Ottowa Canada, 
      prepared statement.........................................    76
    Corn Refiners Association, prepared statement................    78
    National Foreign Trade Council, prepared statement...........    79
    Country of Origin Labeling Reform Coalition (COOL) and 
      various organizations......................................    81
    Mars Inc., prepared statement................................    87
    Government of Mexico, Office of the Secretary, prepared 
      statement (with translation attachment).................... 88-90
    National Association of Manufacturers, prepared statement....    91
    National Pork Producers Council, prepared statement..........    96
    National Corn Growers Association, prepared statement........   112
    Produce Marketing Association, press release.................   113
    Produce Marketing Association, prepared statement............   114
    U.S. Chamber of Commerce, prepared statement.................   115
    Western Premiers, prepared statement.........................   122
McDonnell, Leo:
    Addendum in response to Senator Roberts question on 
      responding to retaliatory tariff's.........................    19
 
                       COUNTRY OF ORIGIN LABELING
                         AND TRADE RETALIATION:
                          WHAT IS AT STAKE FOR
                      AMERICA'S FARMERS, RANCHERS,
                       BUSINESSES, AND CONSUMERS

                              ----------                              

                        Thursday, June 25, 2015

                              United States Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                     Washington, DC
    The committee met, pursuant to notice, at 10:04 a.m., in 
room G50, Dirksen Senate Office Building, Hon. Pat Roberts, 
Chairman of the committee, presiding.
    Present or submitting a statement: Senators Roberts, 
Boozman, Hoeven, Ernst, Tillis, Sasse, Grassley, Thune, 
Stabenow, Brown, Klobuchar, Bennet, Gillibrand, Donnelly, 
Heitkamp, and Casey.
    Chairman Roberts. Good morning. I call this meeting of the 
Senate Committee on Agriculture, Nutrition, and Forestry to 
order.
    Before making my statement, I would like to yield to the 
distinguished Ranking Member for a very important statement.
    Senator Stabenow. Well, thank you, Mr. Chairman. Just in 
the interest of all of the terrific Senate women who are here 
today, I just want to congratulate everyone who played and the 
color commentator last night, Senator Klobuchar, for having the 
Congressional women beat the press in the charity game that is 
really a terrific opportunity to raise money for breast cancer. 
It was labeled, ``Beat the Press,'' and we did. I should not 
say ``we.'' I was cheering. It is because I was cheering that 
that happened, but----
    [Laughter.]
    Senator Klobuchar. Right, and the pitcher----
    Senator Stabenow. --Senator Ernst--and the pitcher, yes, 
Senator Ernst and Senator Gillibrand did a terrific job. So, 
Mr. Chairman, it raised a lot of money for a very important 
cause. It was a beautiful night. Our team won, so 
congratulations.
    Chairman Roberts. I am not speechless, I just----
    [Laughter.]
    Chairman Roberts. This is what happens when the Chairman is 
outnumbered----
    Senator Stabenow. That is right. That is right.
    Chairman Roberts. --with regards to--well, anything I would 
say would be not PC, so I will----
    Senator Stabenow. That is true.
    Chairman Roberts. --I will leave it alone.
    Senator Klobuchar. You could say congratulations.
    Chairman Roberts. Yes, congratulations.
    [Laughter.]
    Senator Klobuchar. That would be good. Madam Pitcher, yes.
    [Laughter.]
    Chairman Roberts. I do not know of any member of Congress 
who does not congratulate you on beating the press.
    Senator Stabenow. That is right.
    Chairman Roberts. With all due respect.
    [Laughter.]

 STATEMENT OF HON. PAT ROBERTS, U.S. SENATOR FROM THE STATE OF 
KANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION, AND 
                            FORESTRY

    Chairman Roberts. Today, the committee turns its focus once 
again to the issue of mandatory country of origin labeling, or 
COOL. Now, I have got a bit longer statement today and time 
will be extended for the distinguished Ranking Member, as well.
    My statement is full of history and details, but if you 
take nothing else away, I hope it is this. Facts are stubborn 
things, and whether you support COOL or oppose COOL, the fact 
is, retaliation is coming and this committee has to fix it. 
This committee has a long history with COOL, a history that now 
spans three decades. Discussions began in the mid-to late-
1990s.
    Then in the 2002 farm bill, legislative language first 
appeared. Over the course of the next several years, the 
Department of Agriculture attempted to issue regulations 
implementing the program. After the Department experienced some 
difficulty, Congress continually moved the COOL implementation 
deadlines to allow the Department more time.
    Now, with the passage of the 2008 farm bill, the Department 
of Agriculture received more direction from Congress on how to 
implement mandatory COOL, and in the late year of 2008, the 
Department proposed an interim rule. However, they later 
withdrew that rule due to criticism from proponents that the 
regulation was too weak, and it was not until 2009 that the 
mandatory COOL program as we know it was born. That is when we 
began to see mandatory labels appearing on meat that read, 
``Products of the U.S.,'' or ``Product of the U.S. and 
Canada,'' for example. But, that is not the end of the debate.
    Almost immediately upon implementation of the mandatory 
regulations, Canada and Mexico filed suit with the WTO, the 
World Trade Organization. They claimed that the COOL 
requirements were causing the U.S. beef and pork sectors to 
discriminate against Canadian and Mexican origin livestock.
    In 2011, the WTO ruled in favor of Canada and Mexico, 
finding that the U.S. requirements were in violation of the WTO 
commitments by treating the Canadian and Mexican livestock less 
favorably than U.S. livestock. To use a baseball analogy, that 
was strike one.
    Later that year, the U.S. appealed the ruling, but in 2012, 
the WTO affirmed that the United States was in violation. 
Strike two.
    Then the USDA went back to the drawing board to create a 
new set of regulations to implement mandatory COOL, and in May 
2013, they put forth a recommendation that in the eyes of the 
WTO were much worse and much more trade restrictive by 
requiring labeling of meat based on where the animal was born 
and raised and slaughtered.
    Despite the warnings of many in the livestock sector and in 
the Congress, the USDA implemented the regulation and Canada 
and Mexico again took us to the WTO in 2013. In 2014, the WTO 
came back with a decision affirming for the third time the 
claims of discrimination brought by Canada and Mexico.
    Of course, the U.S. appealed that WTO ruling, but on May 18 
of this year, the fourth and final ruling of the WTO 
compliance--that the panel, the WTO compliance panel, affirmed 
that the U.S. attempts to fix mandatory COOL fell short. Some 
would say, strike three.
    Let us not forget that also occurring at this time, we were 
in the midst of the 2014 farm bill negotiations. Congress did 
have the opportunity to fix mandatory COOL in the 2014 farm 
bill. However, some stakeholders wanted to wait out the WTO 
process. My colleagues, that process has played out. There is 
no more time to wait.
    I share this history so all can understand that the 
Congress, the impacted industries, and the regulators at the 
Department of Agriculture have put in endless efforts over the 
past three decades to make mandatory COOL viable. However, that 
objective has not been reached and has cost the U.S. billions 
of dollars.
    Looking at my home state alone, a Kansas State University 
review of the current mandatory COOL regulations found that 
compliance has already cost Kansas $500 million. Despite the 
best of intentions of COOL supporters, the USDA estimated that 
mandatory COOL has cost the U.S. beef, pork, and chicken 
sectors approximately $1.8 billion. Furthermore, there have 
been no measurable increases in consumer demand to offset the 
losses inflicted on the livestock and the meat sectors.
    These costs are in addition to the strain this policy has 
put on our relationship with two of our closest trading 
partners, Canada and Mexico. That in of itself is cause for 
serious concern. We know that the damages Canada and Mexico are 
seeking are immense. Over $3.2 billion in sanctions on U.S. 
products is possible if we do not repeal mandatory COOL, and 
these are not just ag products in the crosshairs. Listen to the 
list available in 2013. Products including beef, pork, 
cherries, ethanol, wine, orange juice, jewelry, mattresses, 
furniture, and parts for heating appliances are just some--
some--of the targets of the Canadian retaliation. Mexico has 
yet to finalize their list, but we expect it to be just as 
damaging.
    The U.S. economy cannot tolerate such economic injury. Now, 
the House has moved quickly to prevent retaliation by repealing 
mandatory COOL for meat. Now the responsibility falls on us. 
The Senate must act prior to the WTO's authorization of 
retaliation. The WTO stove is hot and we do not want to touch 
it.
    One estimate from Iowa State University suggests that $2 
billion in retaliation applied to U.S. exports would result in 
17,000 lost U.S. jobs, yet we could face significantly higher 
retaliation damages of the $3.2 billion from Canada and Mexico, 
which would lead to many more lost jobs.
    Canada has made repeated statements that they intend to 
proceed with retaliation should the U.S. Congress fail to 
repeal COOL. Just yesterday, the Canadian Minister of 
Agriculture sent a letter to members of this committee stating, 
and I quote, ``For Canada, legislative repeal of COOL is the 
only approach that will achieve this end.'' Another letter was 
sent on Tuesday by the Mexican Secretary of the Economy stating 
this, quote, ``Retaliation is imminent and inevitable unless 
and until the U.S. takes action to repeal the underlying COOL 
statute.''
    I ask unanimous consent to include both of these letters in 
the record. Without objection, it is so ordered.
    [The following information can be found on pages 76 and 88 
through 90 in the appendix.]
    Chairman Roberts. I want to emphasize--I really want to 
emphasize--I understand completely the concerns of some members 
of this committee. I have encouraged alternatives to be brought 
forth, or especially by our distinguished Ranking Member and 
other members of this committee.
    But, as Chairman of this committee, I must emphasize to my 
colleagues and all of agriculture that retaliation is fast 
approaching and the responsibility sits squarely on our 
shoulders to avoid it. It is important to realize that 
regardless of what farm groups, the Department of Agriculture, 
or the USTR says, or regardless of what action Congress may 
take, regardless of what any member of this committee may say, 
Canada and Mexico--only Canada and Mexico--have the ability to 
halt retaliation.
    So, this takes me back to the beginning of my statement. It 
does not matter if you are pro-COOL, and many are, or anti-
COOL, and many are. You cannot ignore the fact that retaliation 
is imminent and we must avoid it. Repeal of mandatory COOL is 
the surest way to protect the U.S. economy.
    The witnesses we will hear from today represent different 
perspectives in the agriculture and food production chain, all 
of whom stand to suffer immensely should retaliation go into 
effect. I want to thank each witness for providing testimony 
before the committee on such an important issue.
    As you can imagine, there are a number of folks--quite a 
few--who would have liked to have testified today. Simply put, 
that was not possible, so as a consequence, I ask for unanimous 
consent to include in the record testimony and letters 
submitted by the companies, trade associations, and coalitions 
listed on the handout included in your materials, all of whom 
urge repeal of COOL to avoid retaliation.
    [The following information can be found on page 81 in the 
appendix.]
    Chairman Roberts. I now recognize our distinguished Ranking 
Member, Senator Stabenow, for any remarks she would like to 
make.

STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR FROM THE STATE 
                          OF MICHIGAN

    Senator Stabenow. Well, thank you very much, Mr. Chairman, 
and I appreciate very much your holding this hearing. I agree 
with you that we need to act together in a bipartisan way and 
appreciate your willingness to work together to be able to move 
something quickly, which is, I believe, overwhelmingly what we 
need to do together. The question is being able to come 
together to determine the right way to do that.
    I want to recognize all of the officials and the industry 
representatives for testifying today. It is really critical we 
hear from everyone involved so we can make sure we are coming 
to the right point.
    COOL is a landmark law. It empowers consumers to know where 
their food comes from. It is supported by America's family 
farmers and ranchers who proudly raise the world's safest, most 
abundant, most affordable food, and we are proud of them for 
doing that.
    This partnership is a big reason that COOL has always 
enjoyed broad bipartisan support in the Senate. Even so, we are 
facing a very significant trade compliance issue that demands 
our full attention.
    As we know, the World Trade Organization has spoken 
decisively regarding COOL. They have spoken about the effects 
on the beef and pork trade with Canada and Mexico very 
specifically. Simply put, inaction from the Senate is not an 
option, not when the threat of retaliation is hanging over 
American agriculture and American manufacturing.
    We both know--we all know that both sides of this debate, 
those who want to repeal COOL, those who want to keep COOL, 
have been dug in for a long time on this issue and that 
entrenchment has not produced a path forward. Now is the time 
to come together to do that. As many of you know, there were 
many conversations in the process of the farm bill to try to 
come together to do that. We were not successful. Now, we are 
here, and now is the moment to do that.
    That is why today's hearing is so important, and that is 
why we need all of our colleagues involved in this discussion 
so that we can find a path forward that is bipartisan and that 
we can do quickly.
    To help jump-start that process, Mr. Chairman, as you know, 
I am offering a discussion draft. I appreciate your comments 
regarding that draft as one option that I hope can be the basis 
for a bipartisan solution that can move quickly through the 
Senate and the House.
    This approach includes two very simple components. First, 
the removal of beef and pork from the mandatory labeling 
provisions deemed noncompliant by the WTO. Second, the 
establishment of a completely voluntary ``Product of US'' label 
for beef and pork, similar to the voluntary Canadian label. It 
is my hope that this simple WTO-consistent approach to 
addressing this dispute will help us find a solution that 
benefits American consumers and American agriculture, while 
also finding a pathway forward between the United States and 
our neighbors to the north and south.
    Now, as a Senator from Michigan whose state borders 
Canada--and we value that relationship, it is a working 
relationship every single day, many conversations not only on 
this issue, but many issues--I know firsthand the vital 
importance of protecting our North American trade 
relationships.
    So, Mr. Chairman, I look forward to working with you and 
members of the committee. I believe there is a way forward that 
accomplishes the goal and one that we can do together and one 
that can move quickly, because I know that that is what we need 
to do. Thank you.
    Chairman Roberts. I thank the distinguished Ranking Member 
for her comments.
    We would like to welcome our panel of witnesses before the 
committee this morning. First, I would like to introduce Barry 
Carpenter of the North American Meat
    Institute from Washington, DC Mr. Barry Carpenter is the 
President and CEO of the North American Meat Institute. He has 
been in a leadership role in the meat packing industry since 
2007, when he became CEO of the National Meat Association, one 
of the predecessor organizations to the North American Meat 
Institute.
    Prior to joining the private sector, Barry retired from an 
illustrious 37-year career as a public servant at the United 
States Department of Agriculture, where he headed up the 
Agriculture Marketing Services. The acronym for that, by the 
way, is AMS. He created the United States Beef Export 
Verification Program that was critical to reestablishing 
American beef export following the first U.S. case of BSE in 
2003. Among many other impressive accomplishments while a 
government servant, Barry has received numerous governmental 
and industry awards, including the Presidential Rank Awards 
from President Clinton and President Bush, and is a member of 
the Meat Hall of Fame.
    Barry was raised on a multifaceted farm in Central Florida 
that produced cattle, hogs, corn, peanuts, and melons. Talk 
about diversification. He graduated in 1969 from the University 
of Florida with a B.S. in animal science, and we look forward 
to Barry's testimony and insight.
    Our next witness is Craig Hill, who is an Iowa Farm Bureau 
President, on behalf of the American Farm Bureau Federation. I 
yield to the distinguished Senator from Iowa for her 
introduction.
    Senator Ernst. Thank you, Mr. Chairman, and thank you, 
Ranking Member. I appreciate this time to give a great 
introduction to a great Iowan. So, thank you to all of our 
witnesses here today, but I would like to take this time and 
introduce Mr. Craig Hill.
    The World Trade Organization's ruling regarding the country 
of origin labeling dispute between the United States, Canada, 
and Mexico is an important issue that could have major impact 
on the U.S. economy and on Iowa, in particular. Iowa is home to 
over 20 million hogs. That is nearly six hogs for every person 
residing in Iowa. Our annual pork sales lead the nation, 
surpassing the next two states combined.
    Additionally, our state boasts almost four million cattle 
and calves on feed scattered across the 88,000 farms in the 
state, almost all of which are family owned. Consequently, Iowa 
is home to a robust meat packaging industry to support all of 
this production.
    Today, it is my great pleasure to introduce one of the 
leaders of our thriving agriculture industry. Mr. Craig Hill is 
a grain and livestock farmer from Milo, Iowa, and since 2011 
has served as President of the Iowa Farm Bureau Federation. As 
President, Craig serves as Chairman of the Board of FBL 
Financial Group, Incorporated, and Farm Bureau Life Companies. 
Additionally, he serves on the American Farm Bureau Board of 
Directors.
    Throughout his years with the Farm Bureau, Craig has been 
involved in a variety of projects. He was instrumental in the 
development of revenue assurance, a revenue-based crop 
insurance program for corn and soybean farmers. He served as 
the first chairman of the Iowa Ag State Group, which consists 
of representatives from all sectors of Iowa's agriculture. 
Craig is on the Board of Directors for the Cultivation Corridor 
Project, which works to enhance the ag, bioscience, economic 
opportunities in Iowa. He is also on the Board of Trustees of 
the Council in Agricultural Science and Technology.
    In addition to his successes in farm and business circles, 
he and his wife, Patti, have two children.
    We are excited to have someone with his depth of knowledge 
and range of experience in the ag industry here with us today, 
and Craig, it is really great to see you again. It is always 
good to have you here. I appreciate having an Iowan on the 
panel with the type of knowledge and expertise that you do. So, 
thank you, Craig, very much for being with us today.
    Thank you, Mr. Chairman.
    Chairman Roberts. I thank the Senator from Iowa, and we 
welcome Mr. Hill.
    Our third witness is Leo McDonnell, the Executive Officer 
and Director Emeritus for the United States Cattlemen's 
Association. The distinguished Senator from North Dakota is 
scheduled to introduce this witness and I yield to her at this 
time.
    Senator Heitkamp. Thank you, Mr. Chairman.
    I am assuming, Leo, that is your hat.
    Mr. McDonnell. Yes.
    [Laughter.]
    Senator Heitkamp. I figured so. It fits with the 
description. I just want to make a point that you are one of 
those guys who are out there in North Dakota making this happen 
and continuing to diversify our opportunity in agriculture. We 
are number one in the nation in a lot of crops, big crops and 
little crops, specialty crops, but we definitely appreciate the 
cattlemen in our state, and so it is a great pleasure to 
introduce a rancher from North Dakota, Leo McDonnell, to 
testify on the importance of country of origin labeling to the 
ranchers of my home state, North Dakota.
    Leo, along with his wife, Debra, ranch in the southern tip 
of the North Dakota Badlands, between Marmath and Rhame, and if 
you have not been there, it truly is God's country. Leo and 
Debra have four children and ten grandchildren. Leo's 
grandparents were natives of another great cattle town, Towner, 
North Dakota.
    The McDonnell's run a registered Angus herd and have a bull 
sale in May in Bowman, North Dakota, along with Angus herds 
near McKenzie, North Dakota. Mr. McDonnell owned and operated 
Midland Bull Test, the largest genetically tested bull 
development and sale in North America, in Columbus, Montana, 
and has since turned that operation over to his son, Steve, as 
Leo and Debra spend more time developing their program in North 
Dakota.
    He has been active in community and cattle groups over the 
years, probably longer than what he cares to remember, 
including as past member of the North Dakota Stockmen's 
Association and a member of the Independent Cattlemen's 
Association of North Dakota, otherwise known as IBAND. Mr. 
McDonnell has also served as Past Chairman of the Montana 
Cattle Feeders and sat on the NCA, today NCBA, international 
marketing committee in the early 1990s.
    Currently, Leo serves as Executive Officer and Director 
Emeritus for the U.S. Cattlemen's Association, USCA, and is a 
member of the Cattlemen's Beef Board, Director on the American 
Angus Association, and most recently stepped down from NCBA CBB 
Industry Long-Range Planning Committee, which has been tasked 
with setting the direction for CBB spending and various 
industry groups policies.
    I think Leo knows a few things about ranching, knows a few 
things about the cattle business, and knows what is good for 
the cattlemen of our country and for the state and for the 
region.
    Thank you so much for traveling to Washington, DC, Leo. We 
appreciate and look forward to your testimony.
    Chairman Roberts. I thank the distinguished Senator from 
North Dakota. Thank you, Senator Heitkamp.
    Our fourth witness is Jaret Moyer, President of the Kansas 
Livestock Association, a good friend. Jaret Moyer and his wife, 
Shawna, ranch in the Kansas Flint Hills, where they run a 
cattle backgrounding operation. Jaret is current President of 
the Kansas Livestock Association and serves on the KLA 
Executive Committee and its Board of Directors. He also serves 
on the National Cattlemen's Beef Association Board of Directors 
and is the Past Chairman of the Kansas Beef Council.
    In addition to his many leadership positions in the beef 
industry, Jaret is also President of the Citizens State Bank 
and Trust Company. He is a graduate of Kansas State University, 
the home of the ever-optimistic and fighting Wildcats----
    [Laughter.]
    Chairman Roberts. --with a degree in animal science. Jaret 
also completed coursework at the Graduate School of Banking in 
Madison, Wisconsin.
    I am very glad to welcome a fellow Kansan and a friend and 
a fellow Wildcat to our nation's capital.
    Our fifth witness was to be introduced by Senator 
Gillibrand, but she had to leave, and so I yield to the 
distinguished Ranking Member.
    Senator Stabenow. Thank you very much, Mr. Chairman, and 
Senator Gillibrand apologized. She wanted very much to 
introduce Mr. Trezise, but had to leave for another hearing and 
hopefully will be able to come back and join us.
    Jim Trezise currently serves as the President of the New 
York Wine and Grape Foundation, a position he has held since 
the Foundation's creation in 1985. In addition to his role as 
President, Mr. Trezise is the founder and President of the 
International Riesling Foundation, a coalition of top riesling 
producers from around the world seeking to promote riesling and 
educate consumers.
    He serves on the Presidential Council at FIBS, based in 
Paris. He is a member of the Executive Committee and Board of 
Directors of Wine America, the national organization of 
American wineries, as a board member of the National Grape and 
Wine Initiative, and as a board member of the Wine Market 
Council.
    He has received numerous awards and recognitions, most 
recently the Grand Award of the Society of Wine Educators in 
2014.
    In short, he is one of the greatest champions of the New 
York wine industry and we welcome you today.
    Chairman Roberts. Thank you, Senator Stabenow.
    Our next witness is Mr. Christopher Cuddy, who is Senior 
Vice President and President of ADM's Corn Processing Business 
Unit and an officer of that corporation. In that role, he has 
responsibility for all commercial activity operations and 
production for the company's global corn business.
    Previously, Mr. Cuddy served as President of the Sweeteners 
and Starches in ADM's Corn Processing Business Unit. He has 
also held a variety of merchandising and management roles prior 
to leading the Sweeteners and Starches Group, including time at 
an ADM joint venture based in Guadalajara, Mexico, roles in 
sales, marketing, and distribution of corn-based sweeteners and 
sugar, and North American Sales Manager for ADM Bioproducts. He 
began his career with the company as a Senior Commodity Trader 
with ADM Grain.
    Mr. Cuddy holds a Bachelor's degree in business 
administration from Appalachian State University in Boone, 
North Carolina. He serves on the boards of the Corn Refiners 
Association and Red Star Yeast Company, LLC, an ADM joint 
venture. He is also a board member of the Mid-Illinois Chapter 
of the American Red Cross.
    Mr. Cuddy, welcome, and I look forward to your testimony, 
as well.
    We will start with the first witness.
    [Pause.]
    Chairman Roberts. Excuse me, Mr. Barry Carpenter. Mr. 
Carpenter.

 STATEMENT OF BARRY CARPENTER, CHIEF EXECUTIVE OFFICER, NORTH 
            AMERICAN MEAT INSTITUTE, WASHINGTON, DC

    Mr. Carpenter. Good morning, Chairman Roberts, Ranking 
Member Stabenow, and members of the committee. My name is Barry 
Carpenter and I am the President and CEO of the North American 
Meat Institute.
    The Meat Institute members include 374 meat and poultry 
food manufacturers ranging from the nation's largest to the 
smallest. Collectively, they produce 95 percent of the beef, 
pork, lamb, veal products, and 75 percent of the turkey 
products in the United States. Among the Institute members, 80 
percent are small family-owned businesses employing fewer than 
300 people. These companies operate, compete, sometimes 
struggle, mostly thrive in one of the toughest, most 
competitive, most scrutinized sectors of our economy, meat and 
poultry packing and processing.
    Make no mistake, the Meat Institute has opposed mandated 
country of origin labeling since the beginning. COOL for beef, 
pork, and chicken is a non-tariff trade barrier that adds great 
cost while providing no benefit. Further, USDA has repeatedly 
stated that COOL is not a food safety program and all credible 
parties have agreed.
    Government-mandated COOL is not WTO compliant. Let me 
repeat that. Government-mandatory COOL is not WTO compliant.
    This is a settled matter. In four separate decisions, WTO 
has ruled against the United States concerning COOL, putting 
the United States on the brink of having its most important 
trading partners impose $3 billion in annual tariffs on U.S. 
products.
    Let us be candid. The most vocal proponents of COOL for 
livestock have a single objective, to block the importation of 
livestock from our neighbors. 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.
    COOL must be repealed now to bring the U.S. into compliance 
with its trade obligations and put an end to this protectionist 
nonsense. The U.S. has run out of opportunities to try to fix 
COOL. We should stop talking amongst ourselves to address COOL. 
We should be talking with the Canadians and Mexican 
governments. To do otherwise is a fool's errand. I can tell 
you, the Canadian and Mexican governments are very clear. 
Repeal is the only solution.
    The House of Representatives recognized the gravity of the 
situation and 300 members of that body voted on a bipartisan 
basis to repeal COOL for beef, pork, and chicken. It is time to 
repeal government-mandated COOL for beef, pork, and chicken 
before Canada and Mexico levy a $3 billion annual retaliatory 
penalty that will cost jobs across the economy in virtually 
every State. We urge the Senate to move quickly and put this 
failed experiment behind us once and for all.
    Thank you for the opportunity to participate in this 
hearing, and I would be pleased to answer questions.
    [The prepared statement of Mr. Carpenter can be found on 
page 42 in the appendix.]
    Chairman Roberts. Mr. Carpenter, I thank you very much. You 
made your point and you had two minutes remaining, which is 
very unusual for a witness before the Senate.
    [Laughter.]
    Chairman Roberts. I am not sure what kind of an award we 
will give you, but we will think about it.
    Our next witness is Mr. Craig Hill, Iowa Farm Bureau 
President, on behalf of the American Farm Bureau Federation. 
Mr. Hill.

     STATEMENT OF CRAIG HILL, PRESIDENT, IOWA FARM BUREAU 
 FEDERATION, MILO, IOWA, ON BEHALF OF THE AMERICAN FARM BUREAU 
                           FEDERATION

    Mr. Hill. Chairman Roberts and Ranking Member
    Stabenow, members of the Senate Committee on Agriculture, 
it is a great opportunity for me to be here today and to stand 
before you today as you take the next steps forward to resolve 
this longstanding and contentious trade dispute between the 
United States and North American neighbors.
    My name is Craig Hill and I am a grain and livestock farmer 
from Milo, Iowa. I currently serve as President of the Iowa 
Farm Bureau Federation, also a member of the Board of Directors 
of the American Farm Bureau, as well as a member of their Trade 
Advisory Committee. I am pleased to present Farm Bureau's views 
today regarding the hearing on ``Country of Origin Labeling and 
Trade Retaliation: What is at State for America's Farmers, 
Ranchers, Businesses, and Consumers.''
    Farm Bureau policy clearly states, set by our grassroots 
members, that we support country of origin labeling for a wide 
variety of agricultural products. Our policy states we support 
country of origin labeling, COOL, that conforms to the COOL 
parameters and meets WTO requirements.
    The American Farm Bureau has consistently supported the 
efforts of the U.S. Government to resolve the World Trade 
Organization, WTO, rulings that found in favor of Canada and 
Mexico regarding their challenge of the U.S. beef and pork COOL 
programs. With the latest WTO decision that rejected the U.S. 
appeal in the COOL case, it is clear. It is clear now that it 
is time to act, time to prevent Canada and Mexico from imposing 
retaliatory sanctions that will negatively impact U.S. 
agriculture and other goods and commodities.
    The WTO determination that provisions in the U.S. mandatory 
country of origin labeling for beef and pork is illegal under 
international trade rules and allows Canada and Mexico to 
impose these tariffs against U.S. ag commodities and other 
goods until the case is finally resolved between the parties. 
The WTO has consistently ruled against both the original USDA 
regulations and the revised regulations set forth by the 
Department in implementing mandatory COOL in accordance with 
farm bill provisions.
    To be clear, Farm Bureau supports the repeal of COOL 
requirements for beef and for pork which have been found do not 
comply with the WTO rules, and we also support the action taken 
by the House Ag Committee to repeal COOL for chicken. We 
appreciate the support this approach has given and also the 
effect of keeping and maintaining our COOL programs in place 
for other crops and commodities, including lamb, goat meat, and 
et cetera.
    The key factor in our position is the fact that WTO's final 
ruling opens the gate for retaliation by Canada and Mexico 
against the United States. As you are no doubt aware, after 
Canada presented its request, the WTO dispute settlement body 
on June 17, 2015, for retaliatory tariffs equaling $2.52 
billion worth of trade. The U.S. objected to the amount 
requested and this objection triggers a 60-day arbitration 
process.
    Mr. Chairman, 30 percent of Iowa's economy is predicated 
upon agriculture. Twenty percent of Iowa's workforce is either 
directly related to agriculture or indirectly related to 
agriculture. Eighty-thousand jobs in Iowa are export dependent 
with a whole array of products.
    Senator Ernst mentioned that we had lots of hogs in Iowa. 
Well, actually, our sales are $44 million a year of $144 
million that are produced nationally. Twenty-five percent of 
America's corn is produced in Iowa. Canada is Iowa's number one 
export market. I understand number two in the U.S., but number 
one for Iowa. Iowa State University, as you mentioned, claims 
that 17,000 jobs nationally would be lost if this retaliatory 
effort began.
    So, to echo your remarks, it is intolerable and we urge the 
repeal of COOL. Thank you.
    [The prepared statement of Mr. Hill can be found on page 49 
in the appendix.]
    Chairman Roberts. Well, thank you, Mr. Hill. You also made 
a concise statement, very clear, with about a minute to go. So, 
we have three minutes to the good. We will put that in the 
bank, Senator Stabenow.
    Our next witness is Leo McDonnell, the Executive Officer 
and Director Emeritus for the United States Cattlemen's 
Association. Senator Stabenow and I said it was a close race 
between you and Mr. Trezise, but you have the sharpest tie of 
all the witnesses.
    [Laughter.]
    Chairman Roberts. Simply put, we see you coming.
    [Laughter.]
    Chairman Roberts. Please.

STATEMENT OF LEO MCDONNELL, OWNER/OPERATOR, MCDONNELL ANGUS AND 
   MIDLAND BULL TESTS, RHAME, NORTH DAKOTA, ON BEHALF OF THE 
             UNITED STATES CATTLEMEN'S ASSOCIATION

    Mr. McDonnell. Thank you, Mr. Chairman, Ranking Member 
Stabenow, and members of the committee. I am Leo McDonnell. I 
am owner and operator of McDonnell Angus and Midland Bull Tests 
based out of North Dakota and Montana and I appreciate the 
invitation to be here today on behalf of the United States 
Cattlemen's representing cow-calf producers, backgrounders, and 
feed lot operators, and also representing the largest segment 
of the cattle and beef complex as it has to do with 
investments, the largest segment who, consistently with every 
poll, supported country of origin labeling.
    American cattle producers provide the highest quality 
cattle and beef in the world. U.S. producers are recognized 
worldwide for having the highest and most rigorous standards 
when it comes to how we produce cattle and beef, from our 
conservation practices to having the most respected food safety 
inspection system and to having the highest quality product. 
U.S. beef is considered number one globally, which is why both 
producers and consumers are behind the effort to keep COOL and 
be able to identify our product.
    Efforts to strip this program through a blanket repeal 
approach is unwarranted and unprecedented at this point of the 
process in arbitration. This issue is personal for me, as it is 
for ranching families across the country. My wife and I ranch 
in the south western tip of the North Dakota Badlands, just 
five hours from where my grandparents called home and 
homesteaded in Towner. We run multiple registered herds.
    We also run the largest genetic seedstock test station and 
bull sale in North America, with sales in Montana, a three-day 
sale in Montana and one in North Dakota. We genetically measure 
about 2,500 to 3,000 bulls. As I noted before, we are, I think, 
the largest seller of breeding bulls in North America. I do not 
know that for a fact. It is not the way we measure our 
business.
    But, we sell bulls into Canada, Mexico, Brazil--we actually 
partner with one of the largest ranchers in Brazil--Argentina, 
Australia, and New Zealand. We were also involved in very large 
shipments of breeding females to Turkey and Russia as they 
started up their agriculture industries in recent years and was 
involved in the very first shipment of breeding bulls quite a 
while back to Uruguay.
    I note all that because my family and I have never seen a 
problem with being both pro-COOL and pro trade, and I take a 
little offense to having people call COOL as a protectionist 
act, because nothing is protectionist about it. We do it on 90 
percent of the other products we bring into the United States.
    COOL was founded, though, as much to address deception in 
the marketplace as it was to address something so simple as the 
consumers deserving the right to know where their beef products 
come from. Since the late 1980s, we have been told by experts 
that those in the ranching business need to learn how to 
compete in the global market. You tell me how we can compete if 
we are not allowed to differentiate our product. That does not 
work in a capitalistic society.
    In other words, COOL is a program designed to promote 
choice and COOL also initiated a historic partnership between 
cattle country and consumers, and I would sure hate to lose 
that during the Information Age.
    The WTO has found some problems with COOL, but do not 
forget, one of the problems was that it did not go far enough, 
that it excluded some segments of our industry; such as, food 
service and wholesale. That was one of the early discoveries. 
That it is only perceived, the segregation costs that they 
found were discriminatory. They have not provided an economic 
analysis and they so admitted it in the last ruling. All other 
sectors of the ag industry have origin labels--``avocados from 
Mexico.''
    You know, we should be stepping forward to meet those 
interests from consumers wanting to know where their food comes 
from instead of stepping backwards in trying to repeal this law 
and going back to deceptive practices.
    There is no question, we have hit a roadblock at the WTO, 
legitimate or otherwise. The global market is demanding U.S. 
beef and this ongoing case threatens the ability of our 
producers to seize these opportunities to compete.
    These differences have made it tough for us to address this 
issue. Unsubstantiated retaliatory tariffs--and I say 
unsubstantiated, because the arbitration process we are going 
through today, has shown in the past that in other cases where 
foreign countries have threatened $3 billion tariffs, and at 
the end of the day, such as in the gambling cases, got $25 
million. Nonsense.
    I want to thank you all for considering looking at 
voluntary. We want to be able to keep what we have invested in 
so far. We want to have that opportunity if the arbitration 
fails. We want to preserve the integrity of the ``U.S. beef'' 
label and preserve our opportunity to truly compete in a global 
market. Thank you.
    [The prepared statement of Mr. McDonnell can be found on 
page 53 in the appendix.]
    Chairman Roberts. Mr. McDonnell, you have a very impressive 
background. Senator Heitkamp, when she introduced you, said she 
had not seen you for a while, but that is your hat. In Dodge 
City, we have an expression, a big hat, no cattle. In your 
case, big hat, lots of cattle.
    [Laughter.]
    Chairman Roberts. We have a lot of bull around this place, 
but you seem to have exceeded even our level of production. I 
thank you for your statement, sir.
    Mr. Moyer.

     STATEMENT OF JARET MOYER, PRESIDENT, KANSAS LIVESTOCK 
                  ASSOCIATION, EMPORIA, KANSAS

    Mr. Moyer. Mr. Chairman, thank you for the opportunity to 
be here today to continue the discussion on COOL. I appreciate 
your leadership on this issue. In my opinion, COOL is a failure 
and the best solution is full repeal.
    I am President of the Kansas Livestock Association, a 
5,200-member trade association representing all segments of the 
cattle industry. KLA members have long opposed COOL because we 
feel it is a cost to us without any benefits. Proponents of 
COOL have long said mandatory labeling would increase demand 
for U.S. beef. After six years of implementation, it is clear 
that is not the case.
    Kansas State University published a comprehensive study in 
November of 2012. Their study utilized multiple methods to 
gauge consumer perception in the use of COOL and came away with 
several findings. The study determined demand for beef has not 
been positively impacted by COOL. In addition, typical U.S. 
consumers are unaware of COOL and do not look for origin 
labeling. USDA's own economic analysis provided to you in May 
supports these findings.
    While proponents of COOL say they have surveys that show 
Americans want to know where their beef comes from, the K State 
study actually measures how Americans vote, and Americans vote 
with their pocketbooks by purchasing beef. As the study found, 
they do not consider COOL in their purchasing decision. Why, 
then, would we incur the costs of a program that the consumer 
is not demanding?
    For a Kansas perspective, we sought input from Glynn 
Tonsor, Associate Professor of Agricultural Economics at Kansas 
State and a primary author of several studies on COOL. In the 
April 2015 report to Congress, Dr. Tonsor and his colleagues 
identified the industry costs of the COOL rules, totaled $8.5 
billion--billion--dollars. The sum of the adverse impacts from 
the rules on all segments in Kansas, as, Mr. Chairman, you 
mentioned earlier, is $500 million. That is $500 million out of 
the pockets of Kansas producers, processors, and consumers for 
a program providing no value.
    COOL is a failed experiment. The WTO has ruled against the 
U.S. four times. The next step is for Canada and Mexico to 
retaliate. We continue to hear some pro-COOL groups and members 
of Congress suggest that the process is not over and, 
therefore, it is too early to act. We disagree.
    We have two options, repeal or face retaliation from two of 
our largest export customers. Both countries are very clear 
about this. The only outstanding question is at what monetary 
level Canada and Mexico will be able to retaliate, damaging our 
economy and costing jobs.
    The Secretary of Agriculture has stated repeatedly there is 
nothing else USDA can do to fix this and that Congress must 
act. He also reports to you in a letter in May that repeal is a 
way to prevent retaliation. On both of these points, we agree. 
The solution is for Congress to repeal COOL now. Three-hundred 
House members demonstrated in a strong bipartisan vote that the 
time has come to stop this madness. We encourage the Senate to 
exhibit the courage to do the same.
    Mr. Chairman, thank you for this opportunity to be here 
today.
    [The prepared statement of Mr. Moyer can be found on page 
68 in the appendix.]
    Chairman Roberts. I appreciate that, and we are 45 seconds 
ahead. This is a great panel.
    [Laughter.]
    Chairman Roberts. Mr. Jim Trezise, President of the New 
York Wine and Grape Association. Please proceed.

 STATEMENT OF JIM TREZISE, PRESIDENT, NEW YORK WINE AND GRAPE 
               FOUNDATION, CANANDAIGUA, NEW YORK

    Mr. Trezise. Chairman Roberts, Ranking Member Stabenow, 
members of the committee, thank you for allowing me to provide 
testimony today on behalf of the New York grape and wine 
industry about the potential retaliatory tariffs on New York 
and other American wines exported to Canada.
    My name is Jim Trezise. I am President of the New York Wine 
and Grape Foundation, which represents grape growers and 
wineries statewide. New York is the third-largest grape and 
wine producing state, with 37,000 acres of grapes owned by 
1,600 farming families, over 400 wineries in 59 of 62 New York 
counties, and an economic impact annually of $4.8 billion for 
the state economy.
    I also serve on the Board of Directors of Wine America, the 
national organization of American wineries, which does such a 
great job representing us in Washington in collaboration with 
our California colleagues from Wine Institute. There are now 
wineries in all 50 states, which means all 100 Senators 
represent wineries and wine has become an all-American farm 
product and art form. Nationwide, the wine industry is growing 
strongly, especially in states like Michigan, Ohio, and 
Virginia, as well as New York, providing opportunities and 
challenges, as well.
    The COOL issue has become one of great importance and 
urgency for the wine industry. We did not really have a strong 
opinion about this until we were forced into the debate because 
of potential retaliatory tariffs on American wines, which would 
have a devastating effect. The urgency is that unless this 
issue is resolved before the August recess, those tariffs would 
take effect in September. Subject to a total appeal, which may 
take two years, American wine would be an innocent victim 
paying a huge price.
    Our New York wine industry has exploded during the past 
decade and especially the past five years. In 2010, there were 
296 wineries, today, 401, and those 105 new wineries represent 
26 percent of all wineries created in the 175 years of our 
industry's existence. This is all great news for New York's 
economy because it means new investment, businesses, jobs, 
tourism, and taxes.
    But, the explosive growth also means we must expand our 
markets. Wine country tourism continues to grow, and so do the 
markets in New York State, but not enough to keep up with the 
number of new wineries, as well. So, we have to expand into the 
export markets and Canada is our number one export market.
    In 2014, the value of wine shipments to Canada originating 
in New York State was over $5.5 million. That income is 
important now, but will be increasingly so as our industry 
continues to grow. The market for all American wine in Canada 
has increased 78 percent since 2010, with wine exports totaling 
$487 million and translating into retail sales of $1 billion, 
representing a 16 percent market share. We are just doing 
great.
    For many years, we and our colleagues in California, 
Oregon, and Washington have benefited from USDA's Market Access 
Program to build key export markets, with Canada right at the 
top. Our program includes many small wineries throughout the 
state. In addition, three large companies are major exporters 
and vitally important to New York's 1,600 grape farming 
families, since among them they purchase more than 90 percent 
of all the grapes grown in New York. In other words, the impact 
is statewide and extends from grape farms to wineries both 
small and large.
    The wine industry worldwide is highly competitive and 
extremely price sensitive. The potential tariff increase by the 
Canadian government would roughly double the price of American 
wines to Canadian consumers overnight, drying up our sales and 
opening the door to competitors from throughout the world. Even 
if the increased tariffs were later dropped, the shelf space 
and restaurant wine listings would be long gone, requiring 
years of effort and millions of dollars to regain them. This 
would be a huge surplus--I mean, the huge surplus of American 
wine which, in turn, would depress grape prices for farm 
families as early as this fall.
    In closing, let me say how grateful we have been to have 
MAP funding to help build export markets for New York and other 
American wines. I hope that investment will not be jeopardized 
by increased tariffs that would make our fine wines 
unaffordable.
    We know there are many facets to this issue and appreciate 
you weighing them carefully. We are here because we feel a need 
to protect our investments, businesses, employees, and 
especially our families.
    So, on behalf of the New York grape and wine industry and 
my colleagues in other states, I respectfully request that our 
industry's future in all 50 states be carefully considered as 
this process moves forward. Thank you very much.
    [The prepared statement of Mr. Trezise can be found on page 
72 in the appendix.]
    Chairman Roberts. We thank you, Mr. Trezise. You finished 
about a minute and 20 left in your statement. Senator Stabenow, 
I cannot remember a panel where each and every one finished 
well ahead of the time period.
    Senator Stabenow. I cannot, either, Mr. Chairman. I think 
this is great, and we will just take the time that you have, 
extra time for questions.
    Chairman Roberts. I think if we quit talking, why, they can 
finish----
    [Laughter.]
    Chairman Roberts. --and we can recognize those who have 
persevered and been here.
    Mr. Cuddy, you are on deck. No, you are at bat. I am sorry.
    Senator Stabenow. That is right.

   STATEMENT OF CHRISTOPHER CUDDY, SENIOR VICE PRESIDENT AND 
   PRESIDENT, CORN PROCESSING BUSINESS UNIT, ARCHER DANIELS 
               MIDLAND COMPANY, DECATUR, ILLINOIS

    Mr. Cuddy. Thank you, Chairman Roberts, and thank you, 
Ranking Member Stabenow and all honorable members, for this 
opportunity to share ADM's views on the current country of 
origin labeling rule.
    As you said, Mr. Chairman, my name is Chris Cuddy and I am 
the Senior Vice President at ADM and the President of our Corn 
Business Unit. Earlier in my career, I was President of the 
company's Sweetener and Starch Business, and before that, I ran 
an ADM joint venture in Guadalajara, Mexico, where we 
manufactured corn syrups.
    ADM is one of the world's largest agricultural processors 
and food ingredient providers, with more than 33,000 employees 
and customers in more than 140 countries. We play a vital role 
in feeding the world by buying millions of tons of farmers' 
crops each year, including corn, soybeans, wheat, rice, edible 
beans, and peanuts, transporting these crops to our 300 
processing facilities and transforming them into a wide range 
of food ingredients, animal feeds, and other renewable 
products.
    Here in the United States, we employ 17,000 colleagues in 
our various processing plants, grain elevators, transportation 
and logistics operations, and export facilities. Last year, we 
spent a total of $40 billion with U.S. businesses in all 50 
states. That figure includes farmers and businesses of all 
sizes.
    ADM's ability to generate this kind of economic activity 
depends in no small part on our export businesses. Last year, 
we exported $18 billion worth in crops and finished products to 
markets around the world, including Canada and Mexico. 
Companies in those two countries represent a sizeable portion 
of our customer base. We provide them with everything from 
crops, like corn and rice, to ingredients, like sweeteners, soy 
proteins, wheat flours, and bakery mixes.
    If these valued neighbors and trading partners follow 
through on their threat to retaliate against U.S. products over 
the COOL rule, the economic impact across the food production, 
agriculture, and manufacturing sectors could come to billions 
of dollars. We at ADM have calculated that the cost to our 
company alone would exceed $700 million per year. Retaliation 
would render our exports, from ethanol to soy proteins to corn 
sweeteners, completely uncompetitive.
    As a company and as an industry, we have gone down a 
similar road before and paid a heavy price. Between 1997 and 
2001, Mexico imposed countervailing duties on corn sweeteners 
imported from the United States. It has been estimated that 
direct cost to our industry came to about $800 million and that 
the ripple effect on corn sales amounted to another $400 
million in direct losses. In addition, if we account for the 
cost of industry capacity that went unused during this period, 
the idle time generated another $400 million in indirect 
losses. That is $1.6 billion for one industry.
    As unfortunate as that dispute was, the current situation 
involving COOL will have much more serious economic 
consequences if Congress does not act to prevent retaliation. 
The impact will be felt by ADM and our employees. It will take 
a tremendous toll on American agriculture more generally, 
particularly on farmers and their communities.
    So, Mr. Chairman, honorable committee members, on behalf of 
my colleagues around the world, in the interest of farmers, 
businesses, and communities who will suffer tremendous losses 
if this matter is not resolved immediately.
    I would respectfully ask you to act quickly and decisively 
to prevent retaliation by Canada and Mexico. Rescind the COOL 
requirement for muscle cuts of meat, respect our country's 
obligation as a WTO member; reinforce the United States' 
standing as a responsible trade partner, and return us to 
business as usual right away.
    Thank you for your time, and thank you in advance for 
taking action.
    [The prepared statement of Mr. Cuddy can be found on page 
47 in the appendix.]
    Chairman Roberts. Mr. Cuddy, thank you very much for your 
comments, and once again, you finished way under time. We will 
see if we can do the same thing when we ask questions.
    This is for the entire panel. We will just move down from 
Mr. Carpenter down to Mr. Cuddy. Canada and Mexico will soon be 
authorized by the WTO to retaliate against the United States. 
Once that happens, it does not matter if the Congress, the 
USTR, and the Department of Agriculture all agree that a 
certain labeling approach satisfies the WTO rules, not to 
mention members of the Senate. If Canada and Mexico disagree, 
they can keep any authorized retaliation in place until we get 
a ruling from the WTO. During this time, we expose our farmers, 
our ranchers, our businesses and consumers to pay the price. 
Are you willing to risk any period of retaliation so we can 
test whether another approach to labeling works?
    Mr. Carpenter.
    Mr. Carpenter. None. Very clearly, we are already incurring 
tremendous cost to implement the program and lost market 
opportunities. To put on top of that additional tariffs is 
totally unacceptable.
    Chairman Roberts. Mr. Hill.
    Mr. Hill. The short answer is ``unwilling,'' Senator. 
American farmers are committed to rules-based fair trade 
practices, and there is an issue of good faith here. North 
American partners need to be treated fairly. It has not been 
brought up a lot today, but these obstacles of trade and 
barriers to trade affect all of us and we should be good 
trading partners and repeal this mandatory COOL.
    Chairman Roberts. Mr. McDonnell.
    Mr. McDonnell. If I understand you correct, you are asking, 
are we willing to preempt the arbitration process?
    Chairman Roberts. The question was, are you willing to risk 
any period of retaliation so we can test whether another 
approach to labeling works.
    Mr. McDonnell. Oh. I do not think that is necessary, to go 
that direction, sir. I think we can go through arbitration, see 
where we are at, see where those levels of retaliatory tariffs 
are at, which so far have never been documented. Even our own 
courts here, when AMI and others challenged COOL, said that 
they were not able to prove damages. So, I would like to see it 
go through the process as we have always done before. When we 
get to the end arbitration, if for some reason they get these 
``sky are falling'' tariffs, then be ready to make a move to 
the voluntary.
        [As a preliminary matter, this Committee should 
        consider the troubling implications of the WTO's 
        decisions on COOL. Though the WTO acknowledged that 
        providing consumer information is a legitimate 
        government objective, it also found that any labeling 
        regime which alters the conditions of competition to 
        the detriment of imports violates WTO rules, even if 
        that detrimental impact results solely from legitimate 
        regulatory distinctions. As all origin labels 
        necessarily convey different information about products 
        of different origins, this case could have much broader 
        negative impacts beyond our cattle and beef sectors.
        On May 29, the U.S. Trade Representative expressed 
        these concerns before the WTO:
        Paradoxically however, it would appear from those 
        findings that there is no clear way under the covered 
        agreements for a Member to achieve that legitimate 
        objective (of consumer information).
        When examined as a whole, the Panel and Appellate Body 
        findings appear to mean that the United States cannot 
        require U.S. retailers to inform consumers of beef and 
        pork about where the animals were born, raised, and 
        slaughtered. This is a conclusion with which the United 
        States strongly disagrees.
        USTR concluded that the Appellate Body had failed to 
        address these and other ``serious and systemic 
        concerns'' raised in the dispute. These concerns should 
        give Congress pause.]
    Chairman Roberts. Mr. Moyer.
    Mr. Moyer. Senator, as you know, or maybe have heard in the 
Flint Hills of Kansas, there is the saying that good fences 
make for good neighbors. Now, I do not want to get into other 
issues that that may lead to in this town, but part of that 
saying is the fact that it is the respect of your neighbors, 
and the fence law in Kansas, each one is responsible for their 
half of the fence. So, if I do my part, they are willing to do 
their part. We have a good fence. We have good neighborly 
relations.
    I think it is a farce to try to go down this road of trying 
to see if they are serious when we know they are serious and 
that full repeal would be the best answer, sir.
    Chairman Roberts. Mr. Trezise.
    Mr. Trezise. Mr. Chairman, no, we would not want to see any 
period where the tariffs would be into effect because it would 
basically unravel the whole wine market system that we have 
worked so hard to develop in Canada. Once it starts going, it 
is gone, and our wines would be replaced by wines from 
competing regions around the world. So, we would not want to 
take that risk.
    Chairman Roberts. Mr. Cuddy.
    Mr. Cuddy. As you stated earlier, Chairman Roberts, we have 
lost four times at the WTO. I think we have gone down the path 
correctly, but it is time to respect our obligations as a WTO 
member. So, the answer is no.
    Chairman Roberts. This question is for Jaret. Jaret, as you 
know, Kansas is the third-largest cattle producing state in the 
U.S. You certainly emphasized that in your statement. Further, 
our state has a wide variety of cattle producers, from cow-calf 
producers with a couple dozen cows to some of the largest 
feedlots in the country. Being from Dodge City, I certainly 
know that. We smell the money.
    Do you believe Kansas beef producers have options available 
to them when it comes to pursuing ways to differentiate their 
high-quality beef in the marketplace? If so, what are some of 
those options?
    Mr. Moyer. Senator, I really do believe they have those 
options, and I think part of letting them fully realize those 
options is letting them differentiate their products out in the 
marketplace. Like it was said in my testimony, there is a 
sector of the consumer population that wants to buy the U.S. 
beef. That is their main purchasing reason. But, that is a very 
small percentage, and I think we need to allow the producers 
out there to supply that at a premium that they can realize 
instead of supplying it at a cost that they realize.
    Chairman Roberts. I appreciate that. My time is up.
    Senator Stabenow.
    Senator Stabenow. Well, thank you very much to all of you, 
and Mr. Trezise, let me just say that we are very excited about 
the Michigan wine industry. We are winning some awards on 
rieslings, as well, so we are willing to compete with you in 
New York and what you are doing.
    Let me first start, Mr. Trezise and Mr. Cuddy, I am 
assuming, and I certainly understand this, we have a lot of 
food industry, a lot of others in Michigan very concerned about 
resolving this, and so I would ask each of you, if we have a 
solution that can move quickly, bipartisan support, WTO 
compliant, that would include a voluntary label similar to 
Canada, would you object to that? Mr. Trezise.
    Mr. Trezise. I think the question, Senator, is whether 
Canada and Mexico would agree to that and suspend retaliatory 
tariffs----
    Senator Stabenow. Of course.
    Mr. Trezise. --for a time that it would take a look at. We 
do not necessarily have a position on the shape of a bill. What 
we have a position on is we really must avoid any kind of 
retaliation for even one day.
    Senator Stabenow. Absolutely. So, yours is about getting 
this resolved, and I agree with you. We all know the position, 
what is going on with Canada and Mexico. I have been talking to 
them in a lot of different conversations over time, and they 
are looking at the politics and trying to get the best 
position. I understand that. But, I also know what can be done, 
if people want to do it.
    So, Mr. Cuddy.
    Mr. Cuddy. I concur with Mr. Trezise. If it is compliant 
with WTO and it keeps Canada and Mexico from retaliating, then 
we are open to those options.
    Senator Stabenow. Thank you.
    I would like to now turn to the folks representing our hard 
working ranchers and ask each of you, Mr. Hill, Mr. Moyer, and 
Mr. McDonnell--and, by the way, Mr. McDonnell, congratulations. 
It is five on one today, and I think you are doing pretty well, 
so appreciate your position.
    But, I guess I would ask each of you, and Mr. Hill, first 
of all, would the producers you represent support a purely 
voluntary country of origin label for meat derived from animals 
born, raised, and slaughtered in the United States if the label 
were consistent with WTO rules? I should underscore that I 
understand at some point, each of the rancher organizations 
actually have supported voluntary COOL measures, so I am 
wondering if you would still support a version of a volunteer 
effort. Mr. Hill.
    Mr. Hill. I guess those discussions subsequent to full 
repeal of mandatory COOL could be held. First, we need to 
repeal completely this very egregious--what is determined to be 
a very egregious trade violation. After that, I think 
commercial interests, suppliers, can avail themselves today of 
voluntary labeling that indicates country of origin. We have 
got the best ag industry in the world and we have got a great 
food safety system. If people are seeking that label and there 
is a commercial value to it, I think everyone should be capable 
of producing a label that indicates that.
    Senator Stabenow. Okay. Mr. McDonnell, you indicated that 
you are representing the largest segment of the industry today. 
How do you and your organization come to the conclusion that a 
voluntary COOL process would be an acceptable path for ranchers 
looking to resolve the dispute, again, assuming this is WTO 
compliant and, obviously, supported by our partners. But, why 
do you think that a voluntary COOL process is acceptable from 
your perspective and the ranchers you represent?
    Mr. McDonnell. Well, I would like to take it back to early 
in my talk where I said one of the reasons--and, by the way, I 
helped Senator Johnson write the COOL law when Senator Daschle 
was in there, and Senator Enzi, and we would sit around the 
table. But, I was in there right at the start, and Barry is 
aware of that.
    Half the reason we want country of origin labeling is 
because prior to the COOL law you could bring in a Canadian-fed 
steer, a Canadian cow, a Mexican cow, I could bring in loins 
from other countries, and if they were processed, slaughtered, 
or even just season them with salt and pepper, then you could 
call that U.S. beef. There were no definitions for U.S. beef 
except point of transformation.
    So, at the very minimum, I would hope that if we could go 
to voluntary--and I do not think we need to start a new law and 
go through all that process and waste that time and money--
simply change ``mandatory'' to ``voluntary,'' preserve the 
integrity of the U.S. beef label, because I do not think 
anybody wants to vote for repealing it when that means we are 
going back to the old way of deceiving consumers. Simply do 
that and address the few WTO concerns that we did not go far 
enough in other segments of the industry, such as restaurants. 
It is very simple. Everybody walks away a winner. Nobody gets 
harmed. How often does that happen in D.C.?
    Senator Stabenow. Thank you very much, and----
    Mr. McDonnell. Good solution.
    Senator Stabenow. Finally, Mr. Moyer, I know your 
organization, as well, at various points has supported 
voluntary COOL measures, and so I am wondering, within the 
confines of, as I described them, is that a solution if we can 
get this done quickly, with bipartisan support?
    Mr. Moyer. I think, Senator, that is something that we 
could not support, and if you hear hesitation in my voice, it 
is that I am thinking of a story where I would have to admit on 
the Congressional record that my wife was right----
    [Laughter.]
    Mr. Moyer. --and that comes--I am thinking of a piece of 
farm equipment that I a while back purchased at an auction. I 
told her it was going to solve a problem, make our life easier. 
I ended up putting more parts, more time, more work and ended 
up taking it to the salvage yard. She was right. I was wrong. I 
think that is where we are at with the COOL issue, that it is 
time to go ahead and repeal it, allow industry to realize 
premiums and not make industry realize costs.
    Senator Stabenow. It is interesting. Do you think we should 
challenge Canada for their voluntary label?
    Mr. Moyer. That would be up to people much wiser than I in 
the trade areas, but I think that a purely voluntary labeling 
done by industry to realize premiums is a much better way than 
even one brought up through this body.
    Senator Stabenow. Okay. Thank you very much.
    Chairman Roberts. Senator Ernst.
    Senator Ernst. Thank you to the Ranking Member and 
Chairman, and I will direct my question to Craig. Thank you 
again for being here.
    Senator Grassley sends his regrets. He did have to leave 
for another meeting.
    But, as you know, Craig, farmers in Iowa and all across the 
United States are facing low commodity prices, and especially 
those producers in Iowa and those around the Midwest that are 
now facing the outbreak of avian influenza, which has been very 
devastating. In your opinion, how devastating an impact would 
these retaliatory measures from Canada and Mexico have? What 
would the effect be on an already faltering ag economy?
    Mr. Hill. Well, as I mentioned, 80,000 jobs in Iowa are 
export dependent. The estimate has been given that 17,000 jobs 
in America would be lost, and a considerable amount of those 
jobs would be Iowa jobs. So, there has been some studies. An 
ISU study has been mentioned. There was also another study that 
was published in Feedstuffs that indicated a $1.3 billion 
economic impact to Iowa annually. So, that is a very, very 
significant impact.
    We value our relationship with Canada. They are our number 
one trading partner and we just believe it is time, it is time 
to give up on this failed concept that has been determined to 
be illegal.
    Senator Ernst. Thank you, Mr. Hill.
    Mr. McDonnell, I know you have stated you do not want to go 
this far, you do not want to see this happen. Maybe it is the 
sky is falling. But, I do not think the fourth time is a charm 
here coming from the WTO, and Canada and Mexico have the go 
ahead to retaliate. I think they will retaliate. I do think 
that.
    You know, you are saying that you want to keep the labeling 
in place, but I think we have not seen--there is no evidence 
that people are actually using that American labeling when 
making their selections. So, do you think that American 
shoppers are actually using that label to make their decisions, 
or maybe expound a little bit on that statement.
    Mr. McDonnell. Okay. Is there any value to COOL, is what 
you are asking----
    Senator Ernst. Well, are American shoppers actually using 
this labeling----
    Mr. McDonnell. Sometimes it is pretty dang hard to read the 
label. I do not know if you have ever grabbed a package of 
meat, but it is in small print in the back. But, again, COOL 
was not meant to promote. COOL was implemented to allow us to 
be able to differentiate our product. It is up to the industry 
to promote.
    I sit on the Cattlemen's Beef Board. I also sit on the 
Global Growth Committee. We are approving $8 to $9 million 
annually, Barry, in export targeted Checkoff funds which are 
then matched by another $8, $9 million from the USDA. Our 
number one directive to U.S. MEF is to promote U.S. beef in the 
global market arena. The only market where we have ever tested 
the value of promoting U.S. beef. It was reported to us in 
January that U.S. beef brings $3.37 a pound, and the next 
closest competitor is Canada at $2.50. We have never been given 
that opportunity in the U.S. to promote and market U.S. beef 
with our Checkoff. But, where we have been given that 
opportunity in the international market, people go after U.S. 
beef, and it is not surprising because you are able to 
differentiate it and we are able to promote it and we are able 
to market it. That is the way capitalism works.
    I do not want to go back to the dark ages, and I do not 
want the government's money to promote it. But, I do not want 
other downstream industry segments using beef from a foreign 
country and being able to use our label as U.S. beef, and I do 
not think you all do, either.
    So, I would like to see it go to voluntary if needed to 
preserve the law. Preserve the integrity of the label, which we 
did not have before. We will take it from there. I can promise 
you, as American ranchers, we will take it from there. But, 
give us the opportunity first. Do not take it away.
    Senator Ernst. Okay. Thank you very much for your opinion. 
Thank you, Craig, again, for being here today. We appreciate it 
very much.
    Thank you, Mr. Chairman.
    Chairman Roberts. Senator Heitkamp.
    Senator Heitkamp. Thank you, Mr. Chairman, and I thank Leo. 
I mentioned your hat on the table, and I think everybody now 
knows you are not a guy who is all hat and no cattle, right? We 
are pretty clear about what you do for a living and how you 
feel about it.
    But, we do have a situation that we are in right now, and I 
am sure you are sympathetic to what you heard from the wine 
growers and the fact that their business could be, in fact, 
affected by some of the things that the WTO could do, some of 
the things Canada and Mexico are requesting, and so I would 
like to look forward, because we are where we are. What are the 
opportunities to meet the challenges that you have, to 
accomplish what you hope can be accomplished in the cattle 
market, but also recognizing that we need to have some 
processes, some step forward?
    So, I would say we have had mandatory COOL for several 
years. I think the consumers out there have been used to and 
look for that ``Product of the United States'' label at the 
meat counter, contrary to what a lot of people have said here. 
I think that the movement in grocery shopping, if I can put it 
that way, has really been to read labels. It has really been to 
understand sourcing of food. That is an ongoing concern and an 
ongoing issue all across the board in America and we are proud 
of what we do in the beef industry in this country.
    But, how can we maintain that market and build on it, given 
what has happened before the WTO? Do you have any suggestions? 
I think you know Senator Stabenow has proposed a discussion 
draft which we have been very intimately involved in, my 
office. But, I am curious about kind of steps forward as you 
see them, not defending the old system, but looking at what 
might work to accomplish the purpose.
    Mr. McDonnell. Well, and I appreciate that, and I may very 
well be the one that brought up voluntary here about two months 
ago as we were going through this process. I do hate to see us 
cut and run before we finish arbitration, and I will guarantee, 
I sympathize with our U.S. neighbors who are being targeted 
with these unsubstantiated threats. I remember Tom Brokaw and 
his Greatest Generation as he talked about those folks coming 
back from the Depression and the World War, working together 
for family, for community and country, and it truly was the 
Greatest Generation. I hope that I honor them in my share of 
concern for our neighbors.
    But, I hope they also honor those who went before us, too, 
and do not preempt the process we are in today. Certainly, with 
these high retaliatory tariffs, we need to address it. But, let 
these Canadians and our Mexican friends finally put their chips 
on the table and the facts, because so far, it is all 
unsubstantiated scare tactics. They cannot prove it in our 
courts. They cannot prove it in the WTO, that there has been 
any harm.
    If they do, and it is something we cannot live with, then 
just simply go to voluntary, okay, preserve the integrity of 
the label so our friends cannot deceive our consumers. Who 
wants to vote for that? Let the American rancher figure out how 
to promote it, and I guarantee you, we will. But, preserve that 
label and our investment and all the time we have spent on this 
to date.
    Senator Heitkamp. So, I know you are----
    Mr. McDonnell. But, simply going to voluntary. Just change 
one word, ``mandatory'' to ``voluntary,'' for cattle and beef. 
We are there. How much easier and painless can it be?
    Senator Heitkamp. Well, I share your interest in kind of 
looking at how we can continue to provide the consumers with a 
path forward to recognizing where the source of their food is, 
how we can, in fact, continue to the good work that you all are 
doing in terms of sourcing your food.
    But, we are in a situation here where there is a tremendous 
amount of pressure to not wait, a tremendous amount of pressure 
to move forward, and I am assuming that you have had a chance--
I understand, and I had this argument with your colleagues in 
the industry in my office. You know, sometimes we do not always 
get 100 percent of what we want. So, recognizing that, I think 
the Chairman and a number of people here are very interested in 
moving forward.
    Have you had a chance to look at Senator Stabenow's 
discussion draft and do you have any comments you can share 
with us?
    Mr. McDonnell. Well, I appreciate very much your work on 
that, and I support it. I mean, I think the voluntary approach 
is a very reasonable approach. It takes care of the people that 
are scared of the threats, and reasonably, and may have a right 
to be scared of them. No, I think it is a good approach. I 
would like to see it go a little bit farther in addressing the 
WTO concerns that we exempted. Where we failed by exempting 
some segments, such as food service and wholesalers. I mean, if 
somebody is going to label U.S. beef in the United States of 
America, whether it is wholesale or retail, by golly, I think 
we can all agree it better be U.S. beef, and I hope we can all 
agree on that.
    Senator Heitkamp. Thank you----
    Mr. McDonnell. So, I think it is a big step and I 
congratulate you, and if we can find a way to move forward and 
satisfy everyone's concern, how nice would that be in D.C.
    Senator Heitkamp. Well, you fill me with pride, Leo. You 
have spoken like a true North Dakotan, just straight up. Thank 
you so much.
    Chairman Roberts. Thank you, Senator Heitkamp.
    Senator Tillis.
    Senator Tillis. Thank you, Mr. Chair. I am sorry I was 
running late. I had to preside.
    Gentlemen, I am from North Carolina and I am deeply 
concerned with the economic impact that retaliation will have 
in my state. About a third, 33 percent of our exports in 2014 
were to Canada and Mexico.
    I hear the discussion, and actually, Mr. McDonnell, you 
made a reference to having maybe Mexico and Canada put the 
chips on the table, and I think that is probably an interesting 
analogy, because I think all of our chips are on the table and 
Canada and Mexico have an ace in the hole. We have no leverage 
in this. The risk that we have for not repealing COOL is 
significant.
    I think your suggestion about voluntary policies, those 
sorts of things, may need to be looked at, but if they were 
going to happen, they needed to happen long before now because 
the clock is ticking, and I feel like we need to provide 
certainty.
    The thing that concerns me with my producers is we are 
talking about, well, we have got a few more weeks. We can work 
this out. Producers do not think that way. They have product 
that they are thinking about now, and how it is going to end up 
in the supply chain based on whether or not they actually have 
to endure these retaliatory measures.
    I completely agree with what virtually everything you have 
said to consider policies going forward to make sure consumers 
know they are getting meat produced in the United States. That 
is great. But, I do not necessarily think the time is now to do 
that. The time is now to provide certainty to the agriculture 
industries and a number of other industries that can be 
affected if retaliation, which I am completely convinced, after 
meeting with people from Mexico and Canada, is going to go into 
place.
    I also agree that even a day will have a dramatic impact. 
We have estimates of almost a half-billion dollar economic 
impact in North Carolina alone at a time when we are 
negotiating trade agreements and the agriculture industry is 
getting excited because they see great potential for growth. I 
think it would be very helpful for us to set the stage for 
certainty and always look for other opportunities to take care 
of our farmers, our cattlemen, our pork producers, and our 
poultry producers.
    But, I, for one, think we have to start by making the 
difficult decision. I understand some of the concerns on the 
other side of this issue. Repeal, and then continue to look for 
ways to take care of my favorite industry in North Carolina, an 
$80 billion industry, two-and-a-half times bigger than the next 
closest industry. This is a very important industry for me, and 
it is because I know the negative impact that this could have. 
I, for one, think we need to repeal COOL and then work on other 
policies going forward.
    Do many of you agree that we need to understand that even 
the discussion of maybe waiting a week or two or a month to see 
if we can come up with some compromise has an immediate impact 
because of the uncertainty that it creates?
    Mr. Moyer. Senator, I definitely agree. Time is of the 
essence, and if we can get our fence fixed between our 
neighbors now, that is better than next week. I think I 
definitely agree with you.
    Mr. Trezise. Senator, this is Jim Trezise, and yes, I agree 
wholeheartedly as well, and the reason really has to do with, 
as someone said, the supply chain. If there looks to be some 
more delay in terms of resolving this issue instead of 
repealing it, then the importers in Canada are going to stop 
making orders for American wines going up there because there 
is going to be a lot of uncertainty about whether our wines are 
going to continue to sell or not, because if there were the 
tariffs, the wine prices would double. So, a $15 wine now would 
become $30. The consumer is not going to buy it. The store is 
not going to stock it. The importer is not going to buy it, and 
so forth. That does not start at the time the tariff is 
imposed. That starts when the threat of a tariff is in the air, 
which it is now.
    Senator Tillis. That is my greatest concern. You have got 
buyers making decisions today based on the most likely 
probability of the economic environment or the regulatory 
environment that exists in August, and that is why I am a real 
proponent of going ahead and just doing what we need to, what I 
believe many people think that we need to do, to just move 
forward.
    Any other comments? Mr. McDonnell.
    Mr. McDonnell. First of all, I appreciate your 
understanding of agriculture and your concern about the 
uncertainty that we have. If you are in production agriculture, 
which Mr. Hill and I may be the only two at this table whose 
primary income is from that, we deal with that every day, sir. 
We have got a load of fat cattle we are trying to sell this 
week and the market has dropped by about seven dollars a 
hundred weight in the last ten days, which is a considerable 
drop. We learn to live with that.
    I have a concern that if we ever scrap COOL or repeal it, 
it is going to be a battle to ever bring it back because it has 
left a bad taste in some folks' mouth. It is going to be a 
battle to get the description of what U.S. beef should be 
again.
    I will say again, simply take ``mandatory'' out, put 
``voluntary'' in, problem solved and everybody walks away a 
winner and we all understand where we are at when we walk away 
instead of bringing it back up. But, I do very much appreciate 
your concerns.
    Senator Tillis. Thank you, Mr. Chair.
    Chairman Roberts. Senator Boozman.
    Senator Boozman. Thank you, Mr. Chairman, and again, I 
apologize to you and Senator Stabenow for being late. We have 
another hearing going on where Senator Hoeven and myself, were 
actually voting on an appropriations bill.
    Mr. Carpenter, both Canada and Mexico have said they would 
retaliate unless the United States repeals COOL. You have been 
working on the issue for a long time. I guess my question is, 
do you think they are bluffing or do you think they are really 
serious?
    Mr. Carpenter. The indication I get is they definitely are 
not bluffing. They have been in this battle for quite a few 
years, five or six years at least. They have invested a lot in 
it. They have had a lot of economic damage, and they are very 
serious.
    I think it is--as we move forward, if there is a market 
demand for country of origin labeling, the industry will 
respond to that. We have historically done that. If you look at 
the programs USDA has and other voluntary programs, they have 
over 100 programs that do just that. If they get a signal from 
the marketplace that says, we need information, they step up 
and do it, whether it be grassfed, hormone-free, certified 
Angus beef. The system is there. USDA has that power right now.
    So, I think we need to take the Canadians and Mexicans 
serious. They are going to retaliate, and I think we can 
address the marketplace needs that are there through systems 
that already exist.
    Senator Boozman. So, does mandatory COOL have any food 
safety benefits, or is it entirely a marketing program?
    Mr. Carpenter. It is not a marketing program and it has no 
food safety value. In fact, USDA at least five times in the 
regulation for country of origin labeling made it very clear 
that it is not a food safety regulation, and also other parties 
that have looked at it confirm that.
    Senator Boozman. Mr. Hill, in your testimony, you reference 
a report by the USDA that studied whether mandatory COOL had 
any economic benefits. What were the results of that study? Did 
the benefits outweigh the costs?
    Mr. Hill. There were very slim marginal benefits and great 
cost. Senator, if I could indicate a personal experience I had 
as a producer, we on occasion would buy about 1,200 isowean or 
feeder pigs every few months, and I recall talking to a buyer 
looking at the market to see where I could acquire these pigs. 
He said, ``Well, Craig, I have got some Canadian pigs for you, 
but they can be bought a little cheaper, $5 to $8 a head 
cheaper. Some guys have trouble getting them killed. Would you 
want them?'' I asked about the health quality and they said it 
was superior. They said everything was great, but recognizing 
you are going to have a hard time getting them killed because 
of country of origin labeling, the disruption, the segregation, 
the discrimination.
    So, that was a real event that occurred for me and gave me 
that understanding of the economic impact.
    Senator Boozman. Thank you.
    Mr. Moyer, in your testimony, you mentioned the cost of 
complying with the 2009-2013 mandatory COOL rules. What were 
the estimated costs of compliance for both of the rules?
    Mr. Moyer. The study that I was quoting was from Dr. Tonsor 
at K State, where he said that the total cost was $8.5 billion 
to the industry.
    Senator Boozman. Thank you, Mr. Chairman.
    Chairman Roberts. Senator Hoeven.
    Senator Hoeven. Thank you, Mr. Chairman. I appreciate you 
holding this hearing.
    I would like to thank all of you for being here. I would 
particularly like to thank Mr. McDonnell from North Dakota for 
being here, and also I think it is good to hear from you, being 
a producer yourself directly. My family--my grandfather raised 
Hereford cattle, registered Hereford. I am guessing yours are 
black cattle, probably Angus, nowadays. But, we have got a lot 
of great cow-calf operators in our state and it is great to 
have you here and to hear from and from our other witnesses, as 
well.
    My question is that given that there are producers and 
organizations that favor COOL, is there some form of a 
voluntary COOL program that would both meet the requirements of 
the WTO and Canada and Mexico and still, on a voluntary basis, 
allow those to participate that want to?
    So, I am going to start with Mr. McDonnell, being a fellow 
North Dakotan, but, essentially, I am going to ask each of you 
that same question. Is there a voluntary program that could 
work? So, yes, we would repeal mandatory, but you would still 
have a voluntary form so that both sides, both the people that 
favor COOL can still have an option that they think works, but 
we meet the requirements of WTO, and we obviously cannot be in 
a position where our producers face tariffs. You know, we 
cannot have countervailing duty. That is not acceptable.
    So, that is the solution I am asking about, and Mr. 
McDonnell, if you would start, I would sure appreciate it.
    Mr. McDonnell. Sure, and I appreciate your concerns. Again, 
I am going to go back, and I do not think you were in here----
    Senator Hoeven. Yes, I apologize. We were in an 
appropriations hearing.
    Mr. McDonnell. Sure.
    Senator Hoeven. They fell at the same time. I wanted to be 
here, but--so, I may have missed some of the testimony, 
obviously.
    Mr. McDonnell. Yes. I understand. You know, I think this 
whole thing is much simpler than we are giving it credit for. 
But, I think we might all be so entrenched in the different 
ways we are going that we are not hearing.
    I think a very easy out that lets everybody walk away a 
winner on both sides, consumers and producers, and that is 
simply take the existing law where it concerns cattle and beef 
and change it from ``mandatory'' to ``voluntary,'' because if 
you do that, then you still preserve the integrity of the ``A'' 
label, or the ``U.S. beef'' label, which says it has to be 
born, raised, and slaughtered, which, again, is half the reason 
we started COOL, because we had people importing product into 
the U.S., throwing our name on it if they processed it, salted 
it, or cut it up, or slaughtered it, they could call it U.S. 
beef prior to COOL. Did you all know that? Yeah.
    So, just preserve the integrity. That is half the reason we 
want it. Make it voluntary if needed. We will go market it. We 
have proven the value of U.S. beef in the international market 
when we have invested money into it, and that is where KSU 
missed the boat. They never looked at whether it had ever been 
marketed or ever been promoted. They just said there is no 
value. Well, of course, there is no value. You can have the 
best gadget in the world, but if you do not market it, who is 
going to buy it? Preserve that integrity. Make it voluntary. 
Preserve the law. It should be WTO compliant, because it is 
voluntary. You do not have to repeal it. Let us go market it 
ourselves.
    Very simple, everybody wins.
    Senator Hoeven. Let me ask the other panel members their 
thoughts along that line. Mr. Carpenter.
    Mr. Carpenter. Yes. First of all, there is a simple answer. 
We have to start with the priorities. First, we need to repeal 
so we satisfy our concerns about retaliatory tariffs. Get that 
out of the system.
    USDA has significant ability to develop any type of 
marketing program that the marketplace desires. In fact, in my 
earlier career at USDA, we actually in the late 1990s put 
together a program specifically for born, raised, and 
slaughtered U.S. beef products.
    The marketplace has not used it--did not use it--because 
the demand was not there. It may be there now. But, USDA has 
numerous of these voluntary marketing programs. It has the full 
authority to do them. They do them for grassfed. They do them 
for Angus beef. They do them for over 100 different programs.
    So, the program is there. USDA could tomorrow develop a 
program and put it out there. They cannot make the consumers 
want it, they cannot make them buy it, but they can sure put it 
out there, and if the industry wants to get out there and push 
it, they can do that. It is pretty simple and it is market-
driven and that is what this is all about.
    Senator Hoeven. Mr. Hill.
    Mr. Hill. I would concur with Mr. Carpenter. He said 
exactly what I would say, but much better, and he is the expert 
in this area. The first threshold would be, is it WTO 
compliant, and if you can cross that threshold and then look to 
USDA and what is permitted, what is available today, I think we 
should look at those and have discussions around that. I think 
those opportunities are available today through USDA and I do 
not see any harm in pursuing that.
    Senator Hoeven. Mr. Moyer, you are a producer, too, I 
understand.
    Mr. Moyer. I am.
    Senator Hoeven. You have got a moustache, so that is 
another plus.
    Mr. Moyer. Okay. I agree.
    [Laughter.]
    Mr. Moyer. Sir, as a beef producer, I would definitely 
agree with Mr. Carpenter in the fact that I do not believe it 
is worth the risk of any type of retaliation and the effect 
that it will have not just on my industry, the beef industry, 
as well as others that have got drug into this.
    I do believe, and I agree with Mr. McDonnell, that if you 
give the producers the ability to go out and market through 
something like what Mr. Carpenter brought up, I think we will 
see results. But, then it is producers like myself working with 
people up the processing chain from me and trying to work out 
premiums and discounts, not just the discount that the industry 
is seeing right now.
    Senator Hoeven. Mr. Trezise.
    Mr. Trezise. Senator, yes, thanks for the question, and I 
must say that for us in the wine industry, it is a bit surreal 
to be talking about this.
    Senator Hoeven. You look like a cattle guy for a guy in the 
wine industry.
    [Laughter.]
    Mr. Trezise. I am the wine guy.
    Senator Hoeven. I do not know----
    Mr. Trezise. Wine and beef. But, it is surreal because wine 
has been COOL before there was COOL. I mean, every bottle of 
wine that you buy in the United States or around the world has 
a country of origin on it.
    In fact, the vast majority of them also have a region of 
origin--Napa Valley, California, Finger Lakes, New York, 
Barossa Valley, Australia, Champagne, France, and so forth--
because we are very, very proud of where we grow the grapes or 
make the wine from.
    So, we obviously do not have an issue with the idea of 
letting consumers know where our product comes from, for sure. 
We are not certainly going to demand that other products have 
the same type of system.
    But, it is very interesting, and I do agree with Mr. 
Carpenter, as well. I think the first order of business must be 
repeal, just so we can make sure that we are not going to get 
retaliated against.
    If the industry and the Congress and our trading partners 
want to work on some other voluntary solution or something, 
then I do not know that we would even be involved with that. 
But, I think repeal is number one.
    Senator Hoeven. Mr. Cuddy.
    Mr. Cuddy. Thank you for the question. This is all great 
dialogue about what we could do next. The problem is, it is too 
late. We have been found in violation four different times by 
WTO. We do not have time to act on a new policy. We must repeal 
COOL today or we risk billions of dollars worth of retaliation. 
As I mentioned in my testimony, for ADM, $700 million annually.
    I think, going forward, any bipartisan right-to-know policy 
would be fantastic. But today, the number one goal is to 
prevent retaliation from Canada and Mexico.
    Senator Hoeven. Mr. Chairman----
    Mr. Cuddy. We have to do that by rescinding COOL.
    Senator Hoeven. Excuse me. Thanks, Mr. Cuddy.
    Mr. Chairman, thanks for your indulgence on the time. I 
appreciate it very much, sir.
    Chairman Roberts. Well, in previous testimony by the 
witnesses, they finished five minutes under time, so it is 
their bank that you were using, which I appreciate.
    Senator Hoeven. I would like to thank all the witnesses.
    [Laughter.]
    Chairman Roberts. I am not calling you a bank robber, now. 
Do not say that.
    [Laughter.]
    Chairman Roberts. Senator Klobuchar.
    Senator Klobuchar. Thank you very much, Mr. Chairman. Thank 
you to the witnesses. I am sorry, I had a Commerce Committee 
markup, so I just came back. I was here at the beginning.
    I am someone that supported country of origin labeling. I 
think it is good for consumers and it has been helpful to some 
of our producers. I also have companies on the other side of 
this and we have tried to work this out, and I also understand 
the danger of the retaliation.
    But, the one thing I did want to talk about as I look at a 
common sense solution here is just the fact that Canada, the 
country of Canada, has voluntary labeling. So, in reality, do 
you think that Canada and Mexico would actually object if we 
put in place--and I understand your concern, Mr. Cuddy, that 
there would not be time or--but, let us just say that Congress 
got its act together and put in place voluntary labeling. Do 
you think that they could actually object to it when they have 
it themselves? If you could all answer that--and say that it 
was retaliation if their own country has it.
    Mr. Carpenter.
    Mr. Carpenter. Thank you. Canada and Mexico both made it 
very clear that we need to repeal. If you do not take it out of 
the statute, I do not believe they are going to consider it has 
been repealed. Regarding voluntary----
    Senator Klobuchar. No, no. I was not saying not to take it 
out of the statute. I was saying, if you change the statute and 
then you also put in its place the voluntary labeling, do you 
think they would really object to that when they have that 
policy themselves?
    Mr. Carpenter. I think their policy is not the same as 
having it as a part of our statute, which otherwise is 
mandatory. The simplest resolution is to repeal it from there 
and then develop a voluntary program, but to try to put 
something quasi-voluntary into what is perceived and in real 
from the Canadian's perspective a mandatory program, I think, 
puts us at great risk.
    Senator Klobuchar. So, putting in place the same policy 
that Canada has, you think they would actually object to that?
    Mr. Carpenter. The same policy they have, probably not.
    Senator Klobuchar. Okay. Mr. Hill.
    Mr. Hill. Senator, I am just not familiar with the Canadian 
policy. I really cannot speak to it.
    Senator Klobuchar. Okay. Thank you.
    Mr. McDonnell.
    Mr. McDonnell. I am not, either. I am presuming maybe 
Canada uses the old Codex kind of rules, where if it is 
transformed in any way, it becomes a product of Canada. So, if 
we have Montana calves up there and they are slaughtered up 
there, they can make it a product of Canada--I mean, that is 
what we used to have in the U.S. That is what we do not want to 
go back to.
    Senator Klobuchar. Well, I think all they have is voluntary 
labeling----
    Mr. McDonnell. Yeah, but----
    Senator Klobuchar. --and you are right, we can look at the 
details of it.
    Mr. McDonnell. Right.
    Senator Klobuchar. But, they have a voluntary label system 
as opposed to the mandatory, where if retail wants to have in 
their stores labels that say, ``Made in America''--this would 
be our label--they can do it. I mean, that is all it is. It 
does not--it is not required.
    Mr. McDonnell. Right. But, I think that brings up the 
problem of going back to a rulemaking for a voluntary system, 
such as Barry suggested. I mean, you all know what Black Angus 
cattle are? So, you all know what Angus beef is. Under USDA and 
this voluntary kind of program and the PVPs that go with it, 
they only have to be 51 percent black hided. It does not even 
have to be Angus. If you make us go through that system of 
USDA, the opponents to COOL will beat us to death to get rid of 
born, raised, and slaughtered, and go to the system of 
voluntary that they are using in Canada and that we had prior 
to COOL. We will lose the integrity of the U.S. beef label.
    I say, just change the wording in the statute. Once it is 
no longer mandatory, I do not even think it is a WTO concern, 
or they can make it a concern. Thank you.
    Senator Klobuchar. Mr. Moyer.
    Mr. Moyer. Senator, I just do not believe it is worth the 
risk. You know, as mentioned earlier, we have already been 
found uncompliant, not just once, but four different times by 
the WTO.
    I think we really have to go above and beyond what might 
just be acceptable to those countries, and I really do not want 
you to risk dollars that I have got invested, that Mr. 
McDonnell has invested, that the grape growers in New York have 
invested in their products and the price impacts these 
retaliation efforts will have.
    Yes, it may be a case that we could just get by and make 
them happy, but boy, I just hate to take that risk, because 
where we have already been caught in the wrong four different 
times, I think we have to go and----
    Senator Klobuchar. It just seems really odd that they would 
object to something they have themselves, but----
    Mr. Moyer. Well, I----
    Senator Klobuchar. That our country would have to have--
that we could not do what they are doing----
    Mr. Moyer. I would----
    Senator Klobuchar. --that will not really sell with our 
citizens, I do not think.
    Mr. Moyer. I would be cautious of trying to out-guess what 
another government can do. I have a hard time guessing what my 
own will do sometimes.
    [Laughter.]
    Mr. Moyer. Thank you.
    Senator Klobuchar. Yes.
    Mr. Trezise. Yes. I basically agree with Mr. Moyer, and I 
do not know what they would be thinking of, but to me, the 
first order of business is repeal, and then perhaps to explore 
something like that.
    Senator Klobuchar. Okay.
    Mr. Cuddy. The risk of retaliation is just too great at 
this point, and the WTO has given Canada and Mexico permission 
to retaliate. It would be a complete disruption of our food 
supply chain for--across all sectors, frankly. So, the number 
one goal has to be to repeal this law, and then if we want to 
work on something after the fact, I think that is perfectly 
well and good.
    Senator Klobuchar. Okay. Thank you for all your answers.
    Chairman Roberts. Let me point out, before I recognize--
well, look who is here, Senator Casey. Senator Casey, I 
apologize for this, but I want to put this in the record at 
this point.
    With regards to replicating the Canadian COOL system, there 
are several important distinctions to keep in mind regarding 
that system. The only mandatory labeling in Canada is for the 
meat that is imported from a foreign country in consumer-ready 
packaging. All other labeling of meat is voluntary. It allows 
feeder cattle that have been in Canada for at least 60 days 
prior to slaughter to be labeled as ``Product of Canada.'' Here 
is the key. It does not require labeling indicating where the 
animal is born, raised, and slaughtered, thus, there is no 
segregation requirement.
    Senator Casey.
    Senator Casey. Mr. Chairman, thank you very much. Knowing 
that I am the last to question here, or potentially so, I will 
make sure I stay within the time.
    This is a tough issue, and I know there is a great deal of 
difference here and Mr. McDonnell has a tough job today. I am 
in the camp of supporting what our Ranking Member, Senator 
Stabenow, is trying to do with what I would call, and I think 
what--and, in fact, I know what Mr. McDonnell called in his 
testimony a common sense compromise. We have heard that before. 
But, wow, do we need more of those around here on a lot of 
issues.
    I am sorry I was in and out of here. We had a Finance 
Committee hearing today on another big problem, transportation, 
in particular in my state, a real problem, just repairing 
bridges, so repairing and replacing bridges. So, we need common 
sense compromises all over this town.
    But, Mr. McDonnell, I wanted to highlight something you 
said in your testimony. I am quoting, because I think it is a 
good, or an important point to make. You said, and I am 
quoting, ``U.S. cattle producers want the integrity behind the 
`A' label to remain intact. In no circumstance should a product 
not born, raised, and harvested in the U.S. be granted a,'' 
quote, ``U.S. label, `1A''' unquote. ``Through a voluntary 
program, we ask that this label be maintained and not 
commingled with other products originating in Canada or 
Mexico,'' unquote.
    That makes a lot of sense to me, and I would hope that we 
could get as close as possible, maybe not today, but in the 
near term, to that standard.
    You also said, and it is both by way of your testimony, but 
I think you said this just in your summation of your 
testimony--you were not reading, I do not think, at this point, 
but I wanted to go back to it. You talked about the challenge 
of, quote, ``differentiating your product.'' Can you talk about 
that, because I thought that was an important point that needed 
to be highlighted.
    Mr. McDonnell. You are talking about the early challenges 
prior to COOL of differentiating our product, right. At that 
time, they had a system much like we see up in Canada, where it 
was point of transformation.
    If the animal was processed in the United States or beef 
was imported and cut up, ground, or salted, anything, it became 
a product of the U.S. It is especially troubling with cattle 
because nobody eats cows.
    You eat beef, everybody knows the end product is beef, and 
to let such deceptions go on in the marketplace, especially in 
the period we are in today, where consumers want to know where 
their food comes from, we are talking about taking a step 
backwards, ladies and gentlemen; I just do not think repeal is 
acceptable, and I know I have gone past your question.
    My apologies.
    Senator Casey. I appreciate that.
    I also wanted to ask about the issue of cattle exporting 
countries like Canada, both Canada and Mexico, have actually 
experienced a period of record high profits, consistent profit 
margins and stabilization of their herd sizes following the 
implementation of COOL. So, I would ask you, can you elaborate 
on why you think this increase in profit margins may have 
occurred?
    Mr. McDonnell. Well, I do not know if I can tell you why it 
has occurred, but I would like to include in this a response to 
Mr. Cuddy saying the WTO had granted retaliatory tariffs to 
Canada and Mexico. They certainly have not done that. We are in 
arbitration. What the arbitration process now has said is you 
boys now have to prove your scare tactics and put this on the 
table before we can even look at what level of retaliatory 
tariffs you are going to have.
    Part of that, to me, includes what you have asked, Senator 
Casey. It is, how has it hurt Canada? It has not hurt their 
price, because their price has more than doubled since the 
country of origin labeling went in place. The value of their 
cattle imports into the U.S. has more than doubled since 
country of origin labeling went in place. Today, where both of 
those herds were in severe contraction in the early 2000s, in 
2009, when COOL went in place, the contraction slowed down. In 
fact, today and in recent years, we take a higher percent of 
their cattle and beef production, based on their cow herd, a 
higher percent than we have ever taken before.
    Now, is that harmful? How did it damage them? The fact is 
that prices doubled and we are taking a higher percent of their 
product. Now, I would love for somebody to do that for me. 
Thank you for the question.
    Senator Casey. I am out of time. Thank you very much, 
though. I thank the panel. Even where we disagree, we are 
grateful you are here. Thank you.
    Chairman Roberts. Senator Stabenow.
    Senator Stabenow. Well, thank you, Mr. Chairman. I do not 
have questions at this point. I know as we wrap up, I just want 
to thank you for this hearing and indicate that I think for 
everyone listening, you see there is a difference of opinion 
and we have got to come to the middle so we can act. I would 
suggest that everyone who does not have a dog in this fight, or 
maybe I should say a steer or a pig, that if you are not in the 
steer business, the hog business, if you are not directly 
involved in this but you face retaliation, I would urge you to 
come down on the side of urging us to work together to find a 
bipartisan solution so that we can get this done quickly.
    I would also just put forward that I understand why our 
Canadian and Mexican partners are saying what they are now. I 
have had multiple conversations and different conversations 
over the last couple of years. I get it. We all get it. It is 
great negotiating. But, we also understand what we can do and 
should do together to get things done to move forward in a way 
that both recognizes what Mr. McDonnell is talking about in 
terms of standing up for our own ranchers, our own farmers and 
ranchers and consumers, but also meeting the needs of the 
industry more broadly.
    Mr. Chairman, I look forward to working with you, because I 
believe we can do this. We need to do it quickly. I honestly 
believe if we cannot come to an agreement, it will not be done 
quickly. I would urge everyone to work with us in terms of 
finding a common sense solution. Mr. Chairman, you and I do 
that on a regular basis and I look very much forward to working 
with you to be able to get this done. Thanks.
    Chairman Roberts. I thank the distinguished Ranking Member. 
It would not be a real conclusion to the hearing without a 
PowerPoint. Once, when I was chairman of another committee, I 
outlawed PowerPoints, which is the best thing----
    Senator Stabenow. You have a PowerPoint? Oh, my gosh, you 
have----
    Chairman Roberts. No. Well, it is sort of a PowerPoint. It 
is just a poster being held up here by one of my brilliant 
staff members. Why do we not just put it right there. That is 
what we are talking about.
    Now, I hate to use the allegory or the example of my wife, 
because it is going to get me in a lot of trouble, but here is 
some Smithfield St. Louis style pork spareribs. When she goes 
into the grocery store, she first looks at the product. Well, 
that is the product. The next thing she looks at is right here, 
at the price, and that is what probably every consumer does, 
whether it is my wife or me. Well, to tell the truth, I look at 
the product and I do not really care about the price. If I want 
it, I am going to get it.
    But, having said that, what all this is about--if I can 
find it--here is the mandatory COOL label the WTO has deemed 
noncompliant, right here. Very hard to read. But right up here, 
what most consumers will say is a current voluntary program by 
the industry themselves, by the people who have provided, in 
this case, the Smithfield rib product. It says right here, 
``Keep frozen. Product of the United States. USDA processed 
verified.'' That is what they look at. Then they have, really, 
a lot of confidence with regards to this product, and this is 
why we are selling a lot of meat.
    This one has cost us, according to the studies by Kansas 
State University and others and as testified by Jaret, about $8 
billion. That is a lot of money. Consequently, I wanted to 
point that out. We already have voluntary labels applied by 
companies, should COOL be repealed, similar labels indicating 
the origin of U.S. raised pork and beef could be still 
available. We have another one that says, ``Rancher Reserve.'' 
I do not know if that is effective or not.
    Senator Stabenow. Mr. Chairman, I would just note that 
Smithfield is now a Chinese company, so----
    [Laughter.]
    Senator Stabenow. Excuse me.
    Chairman Roberts. Well, I wanted to show this for Mr. 
McDonnell.
    Senator Stabenow. Yes.
    Chairman Roberts. I think his tie is getting a little tight 
here. At any rate, this is Rancher's Reserve tender beef, 100 
percent U.S. beef. So, you can have a voluntary label. On this 
particular product, you have to look up here and it is about 
eight-point, I think, or 12-point--I am an old newspaper guy--
``Product of USA.''
    With all due respect, I do not think many consumers can 
actually see that, but they see this and it is already a 
voluntary label. This cost us $8 billion.
    I will go again to my original statement--end of the 
PowerPoint--just yesterday, the Canadian Minister of 
Agriculture sent a letter to every member of this committee, 
and this is what the Canadian Minister of Agriculture said. For 
Canada, legislative repeal of COOL is the only approach that 
will achieve this end.
    Another letter sent by the Mexican Secretary of the 
Economy, retaliation is imminent and inevitable unless and 
until the U.S. takes action to repeal the underlying COOL 
statute.
    Now, I know that the distinguished Ranking Member and 
myself and other members are going to be meeting, trying to get 
to a conclusion, but at the same time, Canada and Mexico are 
making this statement, and it is imminent. There is no way that 
I can see the WTO is going to reverse their decision, all of a 
sudden, okay, U.S., you can go ahead and do this. This is the 
fourth time. Three strikes, you are out. The fourth time, we 
hit the battle. We do not need to be hit.
    So, as Chairman of the committee, I have to emphasize again 
to my colleagues and all of agriculture that retaliation is 
fast approaching. It is imminent. The responsibility sits 
squarely on our shoulders to avoid this kind of a problem.
    Mr. Cuddy has already pointed out it is costing him $800 
million. Things are already taking place with regards to many 
things that the witnesses have stated.
    So, this takes me back to the beginning of my statement. It 
does not matter if you are pro-COOL or anti-COOL. You cannot 
ignore the fact that retaliation is imminent and we must avoid 
it, and repealing the mandatory COOL is the surest protection 
to the U.S. economy.
    Senator Sasse, I welcome you back to the committee. I know 
you have been busy with other committees, as well. Your 
statement and any question that you may want to ask is welcome 
at this time. Thank you, sir.
    Senator Sasse. Mr. Chairman, I just thank you for holding 
this important hearing and your staff for the very useful 
materials and putting it together. I will not detain our 
witnesses any longer. Many of us have been double-booked at a 
hearing on the cybersecurity attacks that have been ongoing 
over recent months. But, just thank you to you for scheduling 
this hearing, and to the witnesses for your insights.
    Chairman Roberts. Do you have any updates on OPM and the 
cyberattacks?
    Senator Sasse. I want to make jokes about your cell phone 
ringer, but that would not be appropriate at this time.
    [Laughter.]
    Senator Sasse. The clarity of what would come from your--I 
am trying to come up with the name of the tune, the cartoon 
that----
    Chairman Roberts. Just let it go.
    Senator Sasse. ``Frozen.'' Thank you.
    Chairman Roberts. Just let it go.
    [Laughter.]
    Senator Sasse. It would be more insightful----
    Chairman Roberts. Let it go.
    Senator Sasse. --than much of what we are hearing about the 
reality and magnitude of the OPM breaches.
    Chairman Roberts. Well, maybe the other ring tone would be 
appropriate. It is by Johnny Cash that says, ``I Walk the 
Line.'' Every one of these witnesses have to do that.
    To my fellow members, we would ask that any additional 
questions you may have for the record be submitted to the 
Committee Clerk five business days from today, or by 5:00 p.m. 
next Tuesday, June 30.
    This concludes our hearing. Thank you so much for the 
witnesses.
    The committee stands adjourned.
    [Whereupon, at 12:07 p.m., the committee was adjourned.]

      
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