Source: Tom Johnston, MEATINGPLACE, 6/17/15

Canada and Mexico today will request from the World Trade Organization authorization to impose more than $3 billion in tariffs on U.S. goods in retaliation for Washington’s failure to bring country-of-origin labeling (COOL) law into compliance with international trade laws.

Opponents of the controversial law, which the WTO has deemed illegal because it discriminates and devalues foreign livestock, are pulling for the Senate to follow the House’s lead and also repeal the legislation in order to avert the retaliation, likely to be imposed by the end of the summer.

In a press conference organized by the Global Business Dialogue and the National Pork Producers Council, a panel including agricultural leaders from Mexico and Canada said WTO’s fourth and final ruling against COOL means that full repeal of the law is now the only way to avoid retaliation and outlined the process going forward.

“I think it’s important to keep in mind that we’re not desperate,” said John Masswohl, director of government and international relations for the Canadian Cattlemen’s Association. “We want the right fix. We’re not looking for just any compromise, any kind of middle path. We’re seven years into this issue. We’ve spent more than three-and-a-quarter million of producers’ checkoff money on legal fees and advocacy to fight this thing. It’s cost [cattle and hog producers] over $3 million per year since May 2013 when USDA made this worse instead of fixing it. So we haven’t come through all of this just to settle for half a loaf at this point.”

Canada will seek about $2.4 billion in tariffs per year on a list of U.S. products to include beef and pork. Mexico will seek some $713 million in tariffs per year on a list of U.S. exports that country has yet to officially name, though it likely will include meat.
“Retaliation is a COOL tax on U.S. goods,” said Randy Russell, president of agricultural consulting firm The Russell Group, noting that the first year of the “COOL tax” alone could equate to almost $10 billion dollars if applied retroactively to May 2013 when the latest version of the law was implemented.

David Bond, an international trade attorney with White & Case, said the U.S. will have an opportunity to object to the retaliation and if so there will be a 60-day arbitration process with the WTO. That means retaliation could begin in late August.

If the Senate does not repeal the law, the only way Washington could stop the retaliatory tariffs would be to file a new WTO appeal asking to force Canada and Mexico to repeal them. This process, Bond said, would take years and meanwhile the tariffs would remain in place.

Canada and Mexico bought a record $485 billion’s worth of U.S. manufactured goods in 2014, according to Ken Monahan, director of trade policy at the National Association of Manufacturers.

“The stakes are huge,” he said.

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