Agricultural News
WTO Authorizes Retaliation Against US at $1.01 Billion for COOL- NCBA Calls on Congress for Immediate Repeal
Mon, 07 Dec 2015 10:06:40 CST
The World Trade Organization today authorized Canada and Mexico to assess over $1 billion in retaliatory tariffs on U.S. products, closing the long running dispute over the U.S. Country of Origin Labeling rule. National Cattlemen's Beef Association President Philip Ellis says that immediate action is needed by the Senate or retaliation against U.S. exports will soon follow.
"The WTO today ruled that the U.S. COOL rule has cost Canadian and Mexican livestock producers in excess of $1 billion over the past seven years, and has authorized that amount in retaliatory tariffs," said Ellis. "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."
This announcement is the final step in a WTO dispute that has been ongoing for over seven years. Despite efforts by the USDA to amend the rule, the WTO has repeatedly ruled that the U.S. COOL rule discriminates against imported livestock in violation of our trade agreements. The loss of the Canadian and Mexican markets is expected to cost U.S. beef producers 10 cents per pound immediately.
The WTO says the retaliation amount authorized for Canada, based on current exchange rates, is $781,778,000 US dollars annually while the amount of retaliation that Mexico may proceed forward with is $227,758,000 annually, making the total for both countries $1,009,536,000.
"The COOL rule has been a failure on all accounts; it has cost our livestock industry billions in implementation, it has violated our trade agreements with two of our largest export markets, it has resulted in the closure of several U.S. feedlots and packing facilities and it has had no effect on the price or demand for U.S. beef," said Ellis. "The House voted in an overwhelming bi-partisan vote of 300-131 to repeal COOL and it is time for the Senate to do the same before retaliation damages the entire U.S. economy and irreparably harms our strongest trading relationships."
Canada has announced a comprehensive list of products they intend to retaliate against, including not only U.S. beef and pork, but grains, fruits and manufactured goods. Under WTO retaliation procedures Canada and Mexico can also carousel the products they retaliate against, choosing to target certain products during parts of the year. That would maximize the damage to the entire U.S. economy.
"America's cattlemen and women produce the best beef in the world, but we do not support this mandate from the federal government to market our product," said Ellis. "Retaliation is no longer a far off possibility, it is now a reality."
Without legislation to repeal COOL, retaliation will begin in mid-December.
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