Stabenow COOL Proposal Won't Avert Retaliation, Says NFTC
Draft country-of-origin labeling legislation floated by Senate Agriculture ranking member Debbie Stabenow, D-Mich. in June won’t stamp out the threat of Canadian and Mexican retaliation against U.S. exports, said the National Foreign Trade Council in a recent blog (here). The draft proposal (here) gives U.S. industry the opportunity to voluntarily declare goods “made in America.” U.S. agricultural producers hit back strongly against the proposal at a late June hearing (see 1506250027).
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Canadian Agriculture Minister Gerry Ritz also rejected the voluntary proposal after Stabenow offered the legislation (see 1506250063). Ritz has said Canada aims to impose retaliatory tariffs worth roughly $3 billion as early as the end of the summer. Mexico is angling to tack $650 million of tariff hikes on U.S. goods.
While Canada and Mexico have put voluntary COOL systems in place, the U.S. regulations would differ, said the NFTC in the blog. COOL supporters argue incorrectly the voluntary U.S. system could avert retaliation, said NFTC. “The risk in this assumption lies in the details of the U.S. COOL statute, including transportation clauses, which differ from both the Canadian and Mexican statutes,” said the blog. “This could result in a scenario under which Canada, Mexico and the U.S. all have voluntary systems for COOL, but have different legal definitions for what defines a product’s country of origin. If Mexico and Canada disagreed with the language of the U.S. statute, it could result in retaliatory tariffs even though all three countries would have voluntary COOL laws.”
The House overwhelmingly passed legislation to repeal COOL regulations on beef, pork and chicken in early June (see 1506100067). Observers consider the Senate a bigger challenge for repeal (see 1505270016).