The World Trade Organization today authorized Canada and Mexico to impose more than $1 billion worth of retaliatory tariffs on U.S. products in response to the country of origin labeling law.
The ruling, which closes a seven-year tussle over the law that requires meat to be labeled according to the animal’s origin, comes as no surprise to meat industry groups that have advocated for its repeal as it pertains to beef, pork and poultry.
The labeling requirement also applies to fish, shellfish, fresh and frozen fruits and vegetable and certain nuts, but its adverse effect on livestock trade has been the source of continued strife between the U.S. and its two largest trading partners.
In May, the WTO for the fourth time ruled COOL violates U.S. trade obligations, discriminating against imported cattle and hogs from Canada and imported cattle from Mexico.
U.S. industry groups were successful in the House in June in getting the meat labeling repealed, but the Senate has yet to act despite dire warnings from the industry groups.
“The COOL rule has been a failure on all accounts,” National Cattlemen’s Beef Organization President Philip Ellis said in a press release Monday morning.
It has cost the U.S. livestock industry billions in implementation, has violated U.S. trade agreements with two of its largest export markets, has resulted in the closure of several U.S. feedlots, and has had no effect on the price or demand of U.S. beef, he said.
It’s time the Senate follows the House action and repeal it “before retaliation damages the entire U.S. economy and irreparably harms our strongest trading relationships,” he said.
U.S. exports to Canada and Mexico will suffer under retaliation and so will U.S. farmers, business people and consumers, according to National Pork Producers Council, which has opposed COOL since it was first debated by Congress as part of the 2002 Farm Bill.
“We need Congress to repeal the labeling provision for beef, pork and poultry now,” NPPC President, Dr. Ron Prestage stated in a press release on Monday.
Mandatory COOL is one of the most costly and cumbersome rules ever imposed on the agricultural sector, and WTO’s announcement sets in motion retaliatory tariffs that Canada and Mexico will likely complete before Christmas, North American Meat Institute President Barry Carpenter said in a written statement.
“It’s disappointing this matter had to come to this point because we’ve long said it would invite retaliation from Canada and Mexico, our two best trading partners,” he stated.
Canada has already announced a comprehensive list of products it intends to retaliate against, including not only U.S. beef and pork but grains, fruits and manufactured goods, NCBA’s Ellis said.
In addition, WTO procedures allow Canada and Mexico to target certain products during certain times of the year, which would maximize the damage to the entire U.S. economy, he said.
The National Chicken Council is also calling for a repeal of the labeling requirement, noting that losing access to two of the U.S. chicken industry’s largest trading partners would be a devastating blow.
“I am keenly aware that chicken and fowl could be at the top of the list for retaliation by Canada and Mexico and that this labeling law continues to leave the door open for retaliatory action by other countries, too,” NCC President Mike Brown said in a press release on Monday.
USDA has repeatedly tried to address the WTO’s concerns about COOL, but the regulations remain unacceptable and illegal according to WTO, he said.
The American Farm Bureau Federation, which has supported the labeling law and changes to bring it into WTO compliance, now says the risk of retaliation is too great and is urging the Senate to repeal the requirement for beef, pork and poultry.
“U.S. farmers and ranchers could suffer a serious blow if Congress does not act quickly,” AFBF President Bob Stallman said in a written statement.
Other ag groups, however, continue to support the mandate in some form.
U.S. Cattlemen’s Association and National Farmers Union continue to call for a voluntary program. R-Calf USA contends COOL should neither be repealed nor converted to a voluntary program.