Most of the remainder of the proposed rule deals with estimating the costs and benefits of the regulatory change. Because most of the costs related to COOL have already become a part of the current cost structure of the industry, the AMS looked only at the incremental costs associated with the proposed changes in the rule which were calculated to be “comparatively small relative to” the costs associated with the original COOL rule.

For the most part, the changes in the proposed rule are consistent with the analysis by the Stewart and Stewart that we looked at last week: the country responsible for each of the three major production steps (born, raised, and slaughtered) is required to be identified on the label of each muscle cut sold by a retailer and commingling is eliminated in a way that brings the information collected by the industry in line with the information that is available to the consumer.

Without reading a legal opinion like the one produced by Stewart and Stewart, one would not have a clue as to why the AMS was proposing the changes we have just discussed and how these changes are related to the decision of the WTO Appellate Body.

The other problem the WTO Appellate Body identified in the 2009 COOL regulation is that the 2009 regulation exempts processed food items, items sold in food service establishments, and items not sold through a “retailer” from labeling requirements. Perhaps the clarification of the term “retailer” is intended to take care of this although that rationale is not made clear in the language of the proposed rule.

Having looked at a legal opinion of the WTO Appellate Body decision in the COOL case and the proposed rule issued by the AMS in two consecutive columns, next week we will look at various reactions to the proposed rule.

Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of UT’s Agricultural Policy Analysis Center (APAC). Harwood D. Schaffer is a Research Assistant Professor at APAC. (865) 974-7407; Fax: (865) 974-7298; dray@utk.edu and hdschaffer@utk.edu; http://www.agpolicy.org.

 

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