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article imageU.S. slapped with $1.01B retaliatory tariff over COOL label

By Karen Graham     Dec 8, 2015 in World
The World Trade Organization (WTO) has authorized Mexico and Canada to charge the U.S. $1.01 billion in retaliatory tariffs for using "country-of-origin," or COOL labels on meat.
On May 19, 2015, Digital Journal reported the WTO had, for the fourth time, upheld a complaint by Canada and Mexico about U.S. laws requiring retailers to label meat with the country where the animal was born, raised and slaughtered. Canada and Mexico charged that the law was discriminatory against imported meats.
At that time, there was an urgency expressed by lawmakers to repeal the COOL law, which has been in effect since 2009. Many congressmen said the law was a "failed experiment," and most congressmen were afraid of a protracted trade war developing. Yet all these many months since that rush to make amends, Congress has, as usual, balked.
The Monday announcement by WTO
The Wall Street Journal is reporting that the WTO ruled on Monday that Canada can slap around $781 million in tariffs on U.S. products and Mexico can apply about $228 million. In its decision in May, the WTO said the U.S. was putting “a disproportionate burden on producers and processors of livestock that cannot be explained by the need to provide origin information to consumers.”
The ruling not only applies to livestock produced in the U.S., but to fish, shellfish, fresh and frozen fruits and vegetables and certain nuts. It is interesting to note that industry groups were successful in June in getting the House of Representatives to repeal the COOL law, but the Senate has never taken any action on the law, according to Capital Press.
Why the COOL law must be ended
The U.S. got off easy with the ruling because Canada and Mexico had originally asked for $3 billion in retaliatory tariffs. Luckily, WTO used a different way of calculating the totals. Canada has already said possible targets for retaliatory tariffs could include foods like frozen orange juice, ketchup and of course, beef. Also, on the list are stainless steel pipes and tubes, swivel chairs and mattresses.
But while the livestock industry is hoping the Senate will get the COOL law repealed, saying it has been a financial burden to the industry, consumers and some farm groups are against its repeal. The WTO's decision “has undermined U.S. sovereignty and the right of American consumers to know the origin of their food,” said Roger Johnson, president of the National Farmers Union.
Randy Gordon, the president of the National Grain and Feed Association feels different about the labeling law. He is thinking more about our world trade agreements and the new Trans-Pacific Partnership and other initiatives. He said, “A full repeal of COOL is the only policy option available that unquestionably would prevent the imposition of sanctions and the economic damage that would result," reports Food Safety News.
More about country of origin label, canada and mexico, retaliatory tariff, World trade organization, Discrimination
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