UPDATED: Dec. 7, 2015 – 1145 CST – The World Trade Organization has granted Canada and Mexico the right to impose more than $1 billion in retaliatory tariffs against the United States following a seven year dispute over country-of-origin labeling.
In a Dec. 7 news release, the WTO arbitration panel set the annual level of retaliation at $1.05 billion for Canada and $228 million for Mexico. Canada requested more than $3 billion and Mexico wanted $713 million.
In a joint statement, the Canadian beef and pork sectors applauded the decision over the contentious legislation that has been in effect since 2008. Canada and Mexico have appeared before the WTO repeatedly and every ruling was in their favour.
“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,” said the joint statement released.
American agriculture groups were quick to respond, demanding Congress repeal the bill rather than face tariffs on a long list of products that includes beef, pork, produce and consumer goods such as furniture.
The National Cattlemen’s Beef Association, the National Grain and Feed Association and the National Pork Producers Council renewed the call for Congress to repeal labelling requirements for beef, pork and poultry. The statute also applies to fish, produce and certain nuts, but those products were not included in the dispute.
The WTO has ruled the COOL law discriminates against Canadian and Mexican animals that are sent to the U.S. to be fed or slaughtered.
“We need Congress to repeal the labelling provision for beef, pork and poultry now,” said a statement from the National Pork Producers Council.
Last June, the House of Representatives voted overwhelmingly to repeal the meat labelling provisions, but the Senate has not acted.
“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,” said a statement from the NCBA.
The NCBA calculates the loss of the Canadian and Mexican markets could cost U.S. beef producers 10 cents per pound immediately.
In the Senate, agriculture Committee Chair Pat Roberts, a Republican from Kansas, is pursuing legislation identical to the House bill that would repeal COOL to avoid WTO-authorized retaliation, which could begin in mid-December.
The Canadian government has said it will go ahead with retaliation if the law is not repealed.
“If the U.S. Senate does not take immediate action to repeal COOL for beef and pork, Canada will quickly take steps to retaliate,” said federal minister of agriculture Lawrence MacAulay.