WTO Approves C$1.1 Billion in COOL Retaliation

The World Trade Organization has given Canada and Mexico the go-ahead to retaliate against the U.S. for the discrimination caused by American country of origin meat labeling rules.

The arbitrators’ decision issued Monday gave Canada permission to implement retaliatory tariffs worth up to C$1.055 billion per year.

While the approved figure is less than the C$3.1 billion the Canadian government had requested, the Canadian beef and pork sectors welcomed the decision with “great satisfaction,” according to a joint statement.

“Our patience is exhausted. There is no further negotiation to be done and no compromise is acceptable,” said the Canadian Cattlemen’s Association, Canadian Pork Council, National Cattle Feeders’ Association and Canadian Meat Council. “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.”

Whether Canada’s retaliation totals C$3.1 billion or C$1.1 billion, the message to U.S. legislators is the same, says John Masswohl of the Canadian Cattlemen’s Association.

“I think we have their attention. The effect is to get COOL repealed,” he says. Masswohl and other Canadian meat industry representatives will be meeting with US senators in Washington to discuss their response to the WTO decision later today. (continued below)

Canada’s trade minister Chrystia Freeland and ag minister Lawrence MacAulay urged the U.S. Senate to follow the House of Representatives in repealing the labeling rules.

“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 the ministers on Monday morning.

Mexico also received approval to implement US$228 million in sanctions after seeking approval for retaliation worth US$713 million. In US figures, the total annual amount approved by the WTO is approximately US$1.01 billion.

“We have known for some time that the country of origin labeling law violates our international trade obligations. The WTO has ruled that we face over $1 billion in annual retaliation if the Congress doesn’t act immediately to repeal this law,” said House Agriculture Committee Chairman K. Michael Conaway.

The arbitrators’ decision must still be approved by the WTO Dispute Settlement Body, but it’s expected Canada and Mexico will be allowed to implement sanctions on U.S. imports as soon as December 18th.

More to come.

Related: WTO Considering Canada’s $3.1 Billion COOL Retaliation Plan

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