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WTO Sets $1 Billion in COOL Retaliation
The World Trade Organization announced yesterday the amount of retaliatory tariffs on U.S. goods authorized in the country-of-origin labeling dispute with Canada and Mexico, potentially starting the path toward congressional repeal of the controversial law.
In its decision, the WTO authorized a combined $1.01 billion in annual retaliation, $781 million from Canada and $227 million from Mexico. The tariffs will be imposed by the individual countries on as yet unspecified products and could be in place as early as next week.
This ruling is the final step of a trade dispute several years in the making over the U.S. COOL law mandating disclosure of born, raised, and slaughtered information on meat labels. That law was challenged by Canada and Mexico, who ultimately persuaded the WTO that the law accorded unfavorable treatment to Canadian and Mexican livestock because, amongst other things, it required segregation of live animals.
Canada has been much more vocal about retaliatory plans than Mexico, stating in June that it would request authorization for about $2.4 billion on a wide variety of products ranging “from California wine to Minnesota mattresses,” as Gerry Ritz, the former Canadian agriculture minister said last October. When coupled with Mexico's request, the total retaliation being sought came close to $3 billion. U.S. negotiators insisted that number was far too high, suggesting a number closer to $90 million.
In June, the House passed a bill to repeal COOL on beef, pork, and poultry products sold in the U.S., but the Senate has yet to act on the issue. In July, a bipartisan group of Senate Agriculture Committee members led by North Dakota Republican John Hoeven and Michigan's Debbie Stabenow, the committee's ranking Democrat, introduced a bill that would replace the current mandatory COOL regime with a voluntary program on the same day that committee Chairman Pat Roberts, R-Kansas, introduced the House-passed bill on the Senate floor.
Prior to the decision, Capitol Hill sources told Agri-Pulse that COOL repeal in the Senate is a likely outcome, but the size of the retaliatory figure would be a factor. Sources have indicated that a repeal provision may be attached to either the omnibus spending bill expected to be debated this week or a customs enforcement bill also expected to be considered before Congress is scheduled to adjourn for the year next week.
However, National Farmers Union president Roger Johnson said NFU, one of the most ardent supporters of COOL, will “raise hell if any repeal bill or language gets included that falls short of maintaining the integrity of COOL.”
Written by Spencer Chase for Agri-Pulse Communications.