WTO Moves Canada Closer to COOL Retaliation as Senate Prepares Hearing
The World Trade Organization took another step forward in the long-running dispute over U.S. country-of-origin labeling laws for meat on June 17 by referring the U.S. and Canada to another round of arbitration. Canada also formally requested authorization for retaliation at the Dispute Settlement Body meeting, the WTO said (here). Canada intends to raise retaliatory duties as early as the end of the summer, said Agriculture Minister Gerry Ritz recently (see 1506050016).
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WTO dispute settlement is a lengthy process, and several steps remain before Canada is able to tack on retaliatory tariffs. According to WTO rules (here), the referral to arbitration indicates the U.S. contested the Canadian claims of roughly $2.5 billion in domestic damage caused by COOL. The Office of the U.S. Trade Representative didn't respond for comment. The WTO gives, at minimum, 60 days for arbitration to unfold, and no retaliation is allowed during that time.
The Senate Agriculture Committee will hold a hearing on COOL on June 25, the committee said on June 17. House lawmakers moved their repeal bill, HR-2393 (here), rapidly through that chamber and ultimately passed it on June 10 (see 1506100067). Chairman Sen. Pat Roberts, R-Kansas, applauded the move, but no repeal bill has so far surfaced in the Senate.
The Senate must act quickly to avert retaliation on U.S. exports, which will hit both agriculture and manufacturing, said National Foreign Trade Council President Bill Reinsch in a statement following the DSB meeting. “It is now more important than ever for the United States to show its commitment to the multilateral trading system and the WTO by bringing COOL requirements into compliance with our treaty obligations,” said Reinsch.
Mexico is expected to formally request retaliation "later this month," said Reinsch. It is likely to claim roughly $650 million in damages. Both retaliation lists span a wide range of agricultural and other products. After a recent interview with Ritz (here), Reuters reported that Canada will likely “target beef, pork, California wines, mattresses, cherries and office furniture, possibly along with other goods.”