In response to the green light issued by the WTO on Monday, Canada warned that it’s prepared to impose import tariffs of up to $1.054 billion on numerous U.S. goods due to the United States’ failure to reform its country of origin labeling policy.
In response to the green light issued by the World Trade Organization on Monday, Canada warned that it’s prepared to impose import tariffs of up to $1.054 billion on numerous U.S. goods due to the United States’ failure to reform its country of origin labeling (COOL) policy.
The U.S. House this summer passed legislation that would satisfy the WTO’s mandate by repealing COOL for beef and pork products and hold off billions of dollars in retaliatory tariffs from both Canada and Mexico. But the legislation has stalled in the Senate.
In May, the WTO ruled for the fourth, and final, time that the United States’ mandatory COOL law violates international trade agreements. As a result of the WTO’s ruling, Canada and Mexico have the ability to impose retaliatory sanctions and tariffs if the U.S. fails to address its current COOL law.
“The government of Canada has made every effort to convince the United States to comply with its international trade obligations,” said Chrystia Freeland, Canada’s minister of international trade, along with Lawrence MacAulay, minister of agriculture and agri-food, in a statement. “If the U.S. Senate does not take immediate action to repeal COOL for beef and pork, Canada will quickly take steps to retaliate.”
Mexico has estimated its proposed retaliatory actions to be valued at $653 million.
Since earlier this year, the COOL Reform Coalition, which advocates for U.S. compliance with WTO obligations, has lobbied both House and Senate lawmakers to adjust the COOL policy to comply with the WTO’s ruling.
“This decision by the WTO arbitrator is a vivid reminder of the costs of not complying with our international obligations,” said National Foreign Trade Council (NFTC) President Bill Reinsch, a member of the COOL Reform Coalition. “We have had literally years to fix this problem and have not done so, and now we face a billion dollar penalty. The House has acted responsibly by repealing the offending provision, and it is now time for the Senate to do the same thing without delay.”
Canada appears to be giving the U.S. Senate one last chance to complete the COOL reform legislation before it starts imposing the WTO-approved retaliatory tariffs.
“Canada continues to work with our partners in the United States, and in the U.S. Senate, to urge the full repeal of the discriminatory COOL policy for beef and pork,” Freeland and MacAulay said.
Canada prepared to retaliate for unresolved U.S. COOL issues
