Senate Action Needed to Prevent Increasingly Close COOL Retaliation, Say Dairy Producers
Canada and Mexico are moving “continuously closer” to leveling retaliatory tariffs on U.S. exports over U.S. country-of-origin labeling (COOL) on meat muscle products, dairy producers told members of the Senate in recent days, while urging them to quickly pass legislation that brings the U.S. into compliance with global trade rules. Canadian Agriculture Minister Gerry Ritz has repeatedly threatened to retaliate as early as September over past months (see 1507310017), but the World Trade Organization hasn’t yet given the final go-ahead. The WTO convened a hearing on the dispute more than a month ago (see 1509040020).
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Retaliatory tariffs are likely to inflict serious damage on the dairy industry, said the U.S. Dairy Export Council, the National Milk Producers Federation and the International Dairy Foods Association in the Oct. 19 letter (here). “Retaliation against dairy products would come at a particularly challenging time for our industry, given the currently depressed global dairy market which makes sustaining exports in reliable markets all the more critical,” said the dairy producers. “On the farmer side of the industry, multiple cooperatives have already been faced at times this year with oversupplies of milk, causing them to dispose of excess milk at a loss.”
The House overwhelmingly passed COOL repeal in June (see 1506100067). Senate Agriculture ranking member Debbie Stabenow, D-Mich., alongside committee member Rep. John Hoeven, R-N.D., introduced an voluntary alternative, however, in July (see 1508030065). Canada has rejected that proposal, but the Office of the U.S. Trade Representative argues that measure will bring the U.S. into compliance with WTO rules. Canadian retaliation is likely to cover U.S. meat, dairy, wine, furniture, jewelry and a range of other products (see 1506250027).
Many U.S. producers have called for outright repeal (see 1506250027). The dairy industry stopped short of that call, pushing the Senate only to act to bring the U.S. into compliance. “At this advanced stage of the case, that means that any resolution can only be successful at avoiding those tariff penalties if Canada and Mexico agree that it sufficiently addresses their concerns,” said the letter. “Without this agreement, Canada and Mexico would retain their right to continue levying retaliatory tariffs against U.S. exports until a lengthy WTO arbitration process to determine U.S. compliance was ultimately concluded. U.S. dairy producers and processors cannot risk getting mired down in that drawn-out process.”