WTO approves over $1 billion in tariffs against U.S. COOL law
By Rita Jane Gabbett on 12/7/2015 meatingplace.com
The World Trade Organization (WTO) said Canada and Mexico can put $1.01 billion in tariffs on U.S. goods because the country of origin labeling (COOL) law, which the international trade body previously ruled violates U.S. trade obligations, discriminates against Canadian and Mexican animals that are sent to the United States to be fed out and processed.
The COOL statute requires meat to be labeled with the country where the animal from which it was derived was born, raised and harvested. (It also applies to fish, shellfish, fresh and frozen fruits and vegetables and certain nuts.)
The Arbitrator determined that the annual level of nullification or impairment of benefits accruing to Canada as a result of the COOL measure is 1,054.729 million Canadian dollars (about $780 million). Therefore, Canada may request authorization to suspend concessions and related obligations in the goods sector under the GATT 1994 at a level not exceeding that amount annually.
The Arbitrator determined that the annual level of nullification or impairment of benefits accruing to Mexico as a result of the COOL measure is $227.758 million. Therefore, Mexico may request authorization to suspend concessions and related obligations in the goods sector under the GATT 1994 at a level not exceeding that amount annually.
Canada had sought to impose over $2 billion in retaliatory meaures and Mexico had sought over $653 million.
In response, the National Pork Producers Council (NPPC) renewed its call for Congress to repeal labeling requirements for beef, pork and poultry.
The House of Representatives in June voted to repeal the COOL meat labeling provisions, but the Senate has yet to act on the matter.
“America’s pork producers need congressional lawmakers to recognize the imminent harm our economy faces,” said NPPC President Dr. Ron Prestage, a veterinarian and pork producer from Camden, S.C. “Retaliation has been authorized, and our exports to the No. 1 and No. 2 markets will suffer and so will U.S. farmers, business people and consumers.”
WTO COOL decision fuels meat groups’ frustration; all eyes on US Senate
By Rita Jane Gabbett on 12/7/2015 Reactions to COOL decision by WTOmeatingplace.com
Groups representing the U.S. animal protein industries, which have opposed the U.S. country of origin labeling laws since they went into effect in 2009, reacted to the latest blow to the law this morning when the World Trade Organization approved retaliatory tariffs against U.S. products.
“As Christmas approaches the U.S. today got another well-deserved lump of coal from the World Trade Organization (WTO) when that organization found that Canada and Mexico can impose more than $1 billion in retaliatory tariffs because of the burdensome and discriminatory mandatory country of origin labeling (COOL) rule,” said North American Meat Institute President and CEO Barry Carpenter. “The only way to remove this lump of coal in the United States’ Christmas stocking is swift repeal of mandatory COOL.”
The House of Representatives in June voted to repeal the COOL meat labeling provisions, but the Senate has yet to act on the matter. Some industry observers have speculated the WTO move might spur the Senate to act quickly.
“The operative word is ‘quickly’ as Canada and Mexico may start imposing tariffs before the end of the year,” warned livestock analysts in the Daily Livestock Report.
“If the Senate does not act, U.S. beef exports will face a 100 percent tariff in these countries, severely diminishing about $2 billion of beef exports annually,” warned National Cattlemen’s Beef Association President Philip Ellis.
According to the DLR, one third of all U.S. beef exports go to Canada and Mexico. The latest annual data shows in 2014 the U.S. exported 364 million pounds of beef to Canada and 435 million pounds of beef to Mexico.
Chicken producers are also nervous.
“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,” said National Chicken Council President Mike Brown. “NCC supports legislative action that will bring U.S. laws and regulations pertaining to meat and poultry into full compliance with our international trade obligations. NCC urges Congress to repeal the labeling provision for chicken, beef and pork now.”
One aspect that might spur Senate action is that the retaliation will also extend far beyond the poultry and meat industry.
Canada’s preliminary list includes pork, beef, wine, furniture, and a number of other products. Mexico has not released a list yet.
“Soon, a host of industries, ranging from cherry producers to maple syrup processors to wooden furniture and mattress makers, could pay the penalties for this debacle created by some anti-trade organizations who fought for the law,” warned Carpenter.
U.S. Senator Pat Roberts (R-Kan.), chairman of the Senate Committee on Agriculture, Nutrition and Forestry, issued a statement again calling for Senate action to repeal COOL.
“How much longer are we going to keep pretending retaliation isn’t happening? Does it happen when a cattle rancher, or even a furniture maker, is forced out of business? We must prevent retaliation, and we must do it now before these sanctions take effect. I will continue to look for all legislative opportunities to repeal COOL,” said Roberts in a statement.
The National Association of State Departments of Agriculture also called for the Senate to act.
The National Pork Producers Council has also long been a vocal opponent of the COOL labeling law. According to Iowa State University economist Dermot Hayes, the average U.S. pork producer currently is losing money on each hog marketed, and retaliation from Canada and Mexico against U.S. pork would exacerbate those losses.
Canadian Cattlemen’s Association, Canadian Pork Council, National Cattle Feeders’ Association and Canadian Meat Council Welcome WTO Arbitration Ruling on COOL
December 7, 2015
Canada’s beef and pork sectors welcomed today’s long awaited decision by a World Trade Organization (WTO) Dispute Settlement Body (DSB) Arbitration panel with great satisfaction. The arbitrators have determined that Canadian livestock producers have suffered annual damages in the amount of $1.055 billion CAD.
U.S. mandatory Country of Origin Labeling (COOL) has been in effect since 2008. As the arbitrator’s finding shows, in these seven years the cumulative losses for the Canadian beef and pork sectors have been staggering. At every step of the process, the WTO has repeatedly found that the U.S. is in breach of its WTO obligations. The only revision the U.S. has made, in 2013, increased the negative impact on Canadian farmers and meat processors.
Our patience is exhausted. There is no further negotiation to be done and no compromise is acceptable. Canadian livestock producers and meat processors expect the U.S. to do nothing less than repeal COOL or face the immediate imposition of retaliatory tariffs on U.S. goods to the same extent as the damage we have endured.
We applaud the Governments of Canada and Mexico for their persistence in moving the lengthy WTO process to this final point. We will continue to support them as they move forward with the imposition of tariffs on a combined $1.01 billion USD of imports from the United States.
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