Mexico is set to impose tariffs on goods imported from the United States after the World Trade Organization (WTO) today authorized US $1 billion a year in retaliatory tariffs by both Mexico and Canada against controversial meat labeling regulations.
Apples, dairy products, alcoholic beverages and health products will be subject to tariffs, said the Economy Secretariat today, and will remain in place until the United States’ labeling rules are eliminated.
The dispute has been going on since 2009 when the U.S. passed country-of-origin, or COOL, legislation requiring that meat labels indicate where the animal was born, raised and slaughtered.
Canada and Mexico have argued ever since that the regulation represented unfavorable treatment to their countries’ livestock and was “blatantly protectionist.”
The WTO has agreed, ruling several times against the regulation.
Many factions in the U.S. also agree and, in fact, the House of Representatives voted in June to repeal the law, but the Senate has not yet acted.
However, Senate Agriculture Committee chairman Pat Roberts said this morning it was time to do so. “We must prevent retaliation and we must do it now before these sanctions take effect. The WTO has warned us multiple times, and Congress has ignored the warning . . . . Now more than ever, we need to repeal COOL.”
Most U.S. beef and pork producers seem to be of the same mind.
“The COOL rule has been a failure on all accounts,” said National Cattlemen’s Association president Philip Ellis, who said trade retaliation by “two of our largest export markets” could mean immediate losses of 10 cents per pound.
The president of the North American Meat Institute said the WTO ruling “was another deserved lump of coal” for the U.S. in the holiday season and described COOL as “one of the most costly and cumbersome rules ever imposed on the agricultural sector.”
Barry Carpenter said he was reminded of “the sage prophet Pogo, who said, ‘We have met the enemy and he is us,’” referring to a popular comic strip in the 1950s and 60s.
On the other hand, National Farmers Union president Roger Johnson said it was more evidence of inefficiencies and ineffectiveness at the WTO whose process, he charged, “has undermined U.S. sovereignty and the right of American consumers to know the origin of their food.”
Beef and pork producers’ associations in Canada issued a joint statement today saying that full repeal of COOL is the only acceptable action.
“Our patience is exhuasted. There is no further negotiation to be done and no compromise is acceptable.”
Canada and Mexico must wait 10 days before they can implement retaliatory tariffs.
Canadian officials said this afternoon that if COOL is not repealed “Canada will quickly take steps to retaliate.” A draft list of exports that could face the tariffs included live animals, meat products, pasta and wine.
The U.S. Trade Representative’s Office expressed disappointment in the ruling. General counsel Tim Reif said “if Canada and Mexico take steps to raise import duties on U.S. exports, it will only harm the economies of all three trading partners.”
His office will consult with members of Congress “as they consider options to replace the current COOL law and additional next steps.”
Today’s decision authorizes annual tariffs of over $1 billion, $781 million for Canada and $227 million for Mexico. Canada had asked for more than $3 billion and Mexico $713 million, arguing that those were the costs their countries had incurred due to the United States’ labeling rule.