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WTO says U.S.A. could face $1 billion in trade penalties

WTO says U.S.A. could face $1 billion in trade penalties

Decision is in relation to COOL legislation

By Diego Flammini, Farms.com

Another decision in the COOL (Country Of Origin Labeling) situation could see the United States face up to $1 billion in penalties from their Mexican and Canadian trade partners.

Country of origin labeling requires packaged meats to specify where the animals were born, raised and slaughtered. The practice has an estimated economic impact of $1 billion according to the Canadian livestock industry.

“Country of origin labelling harms Canadian and Mexican livestock producers as well as U.S. processors and producers,” said Chrystia Freeland, Canadian Minister of International Trade, and Lawrence MacAulay, Canadian Minister of Agriculture in a joint statement. “It also disrupts the highly integrated North American meat industry supply chain.”

The World Trade Organization (WTO) has deemed the practice discriminatory and given Canada and Mexico the authority to apply retaliatory tariffs.

Mexico’s tariffs could total $228 million while Canada’s tariffs can be as high as $1 billion. The Canadian government said if the United States Senate doesn’t repeal COOL for beef and pork in a timely manner, they won’t waste any time putting the tariffs in place.

Tim Reif, general counsel for the Office of the U.S. Trade Representative said the decision is disappointing and could impact future trade between the three countries.

Pat Roberts, U.S. Senate Agriculture Chairman said he will explore every legislative measure to have COOL repealed, saying it’s important to stop the tariffs before they start.

Since 2011 the WTO has ruled that country of origin labeling treats Mexican and Canadian livestock unfairly. On June 10, 2015, the United States House of Representatives repealed COOL. The American Senate has yet to do so.

Join the discussion and tell us your thoughts on the WTO’s recent ruling on COOL.