US could be hit with about $3 billion in retaliation in COOL dispute

WASHINGTON, June 4, 2015 - Canada and Mexico are seeking the go-ahead from the World Trade Organization to impose just over $3 billion in tariffs against U.S. exports in retaliation for losses they claim to have suffered because of U.S. country-of-origin labeling (COOL) requirements.

In a joint release, the governments said their request for authorization to retaliate was filed today with the WTO and will be considered by the WTO's Dispute Settlement Body on June 17. Canada is seeking retaliatory tariffs totaling about CA$3 billion (about $2.4 billion U.S. dollars) and Mexico will seek authorization for $653 million in sanctions, bringing the total to about $3.053 billion in damages.

The WTO on May 18 ruled for the fourth time against U.S. COOL rules that require meat to be labeled with where the meat-producing animal was born, raised and slaughtered. The ruling ratified complaints filed by Canada and Mexico that the rules violate international trade obligations and discriminated against livestock from the two U.S. neighbors.

Canada has previously announced a list of 38 products that could be facing tariffs, but Ritz said the list was “a living document” and subject to change. “We can add and subtract to it as is required,” he said. The Mexican government hasn’t published similar list, but has indicated it would be similar to a retaliatory list used in a 2009 trucking dispute with the United States.

Today’s joint release from Canada and Mexico noted that the recent WTO decision was final and without the possibility of further appeal.

“We continue to call on the United States to repeal COOL, cease this harmful policy and restore our integrated North American supply chain to the benefit of businesses and workers on both sides of the border,” Ed Fast, Canada's minister of international trade, said in the release.

Ritz said he expects to receive authorization from the WTO to retaliate by late this summer and he said retaliation would be put in place as soon as it is allowed. In the meantime, Ritz was in Washington this week to encourage lawmakers and other American allies in the fight against COOL to push for clean repeal of the provisions. He said he and other Canadian stakeholders are pushing for repeal because retaliation “is never a road anyone wants to travel.” Ritz said talks about a “watered down” version of COOL will not suffice, and Canada will only accept full repeal.

“We’re taking a hard line,” Ritz said. “They can massage, they can talk voluntary, they can do whatever they like after they repeal the COOL initiative.”

Support for repeal appears to be ramping up in the U.S. Last month, the American Farm Bureau Federation (AFBF) changed its position on the issue and called for full repeal. In a release, Bob Stallman, AFBF president, said “it is now clear that we are far better off with no mandatory labeling” and that repeal would end threats of retaliation. AFBF, the nation’s largest farm organization, is far from alone with its calls for repeal. Numerous organizations inside and outside of agriculture have joined the COOL Reform Coalition, which is lobbying Congress to repeal the law.

House Agriculture Committee Chairman Mike Conaway, R-Texas, moved quickly after the WTO ruling in May, producing a bill that would repeal country of origin labeling regulations for beef, chicken, and pork. The measure is on the House floor schedule for the week of June 8. The bill does not have the support of Conaway’s ranking member on the committee, Collin Peterson, D-Minn. In a call with reporters Thursday afternoon, Ritz said Peterson should realize that he’s “had his day” with COOL.

“Well, I think Mr. Peterson is locked into the turn of the century,” Ritz said, referring to Peterson’s efforts to include COOL language in the 2002 and 2008 farm bills. “Unfortunately, as the author of the bill, he’s got a vested interest in seeing it move forward. We’re here to say that the WTO rules body has ruled against his baby from day one.”

Ritz said he met this week with many key American lawmakers including Senate Agriculture Committee chair and Kansas Republican Pat Roberts. He said he was “buoyed by the information that we received this time around” and that many lawmakers that were “on the fence” on the issue appeared to be concerned with the prospect of stiff retaliation. He did note that several lawmakers – namely Peterson and his Senate Agriculture Committee counterpart, Debbie Stabenow, D-Mich. – are still supportive of COOL, but “they’re not going to win in the long run.”

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