Judge leaves USDA to decide on ‘Product of USA,’ but FTC might lend a hand on the labels

The latest attempt to force the USDA to reinstate country of origin labeling (COOL) rules fell short. A federal judge in New Mexico granted motions on Aug. 27 by defendants Tyson Foods Inc., Cargill Meat Solutions, JBS USA, and National Beef Packing Co., to dismiss the two consolidated cases involving the long-fought COOL issue.

USDA enacted COOL rules in 2013 that required meat to be labeled with where an animal was born, raised, and slaughtered. Canada and Mexico claimed they were harmed economically by the COOL labeling scheme and challenged the USDA rule before the World Trade Organization (WTO) and won. The WTO’s ruling permitted Canada and Mexico to impose billions in punitive tariffs unless the United States repealed the COOL rule.

By late 2015, Congress folded by eliminating COOL, and the USDA watered down its labeling requirements to Canada’s and Mexico’s liking. Critics say meat sold under “Product of USA” labels routinely includes foreign product. That’s because the “Product of the USA” label can be used if the product is processed in the United States even if it is of foreign origin.

The consolidated cases that the judge tossed united cattle producers and consumers in claiming “Product of USA” labeling amounts to fraudulent and misleading practice because cattle raised in a foreign country and imported for slaughter and processing can qualify for the label, fooling consumers.

The judge, however, did not see it that way and found the governing statute for labeling leaves the matter within the USDA’s jurisdiction.  And, the judge ruled the USDA is within its authority of regulated country-of-origin labeling and it was not necessary to determine if that labeling might be misleading.

The plaintiffs are reviewing their prospects for appeal. The USDA is also planning on rulemaking that might result in a tougher standard for use of a “Product of USA” labeling standard.

Also, the Federal Trade Commission (FTC) is  currently accepting comments  through Sept.14 on  its proposed  “Made in USA Labeling Rule.” 

The FTC wants to strengthen  “Made in USA” labeling requirements to reserve the USA label only for products in which, among other things, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients of the product are made and sourced in the United States.

The FTC is specifically seeking public comments on whether there are any current statutes, rules, or policies that may conflict with the the commission’s proposal.

It appears to set up a conflict between the USDA and the FTC.  The FTC wants to ensure that only products actually made in the USA bear a “Made in the USA” label, while the USDA policy that says a foreign beef product that enters the USA and is subject to only minor processing, such as being taken out of a big box and packaged in smaller boxes, can bear a “Product of USA” label.