Canada eyes retaliatory tariffs for COOL

Monday, June 8, 2015

by SUSAN MANN

The Canadian government could get the go-ahead as early as this month to slap more than $3 billion worth of retaliatory tariffs on American exports to Canada.

The federal government is seeking World Trade Organization authorization to impose the tariffs, a move that comes as, so far, the United States has yet to repeal its County of Origin Labelling (COOL) law that makes it mandatory for American processors and retailers to list where animals were born, raised and slaughtered. The law, in place since 2008, discriminates against Canadian and Mexican cattle and hogs as U.S. processors must keep them separate from American-born animals. Many U.S. processors have refused to buy the Canadian or Mexican animals while others have heavily discounted prices to farmers from those two countries.

Once the Canadian government gets the WTO authorization, it will decide “how and when to retaliate,” a June 4 press release says.

The request for authorization has been filed with the WTO and the trade organization’s Dispute Settlement Body will consider it on June 17, the release says.

“The WTO has ruled that the United States is out of options and out of time,” federal Agriculture Minister Gerry Ritz says in the release. “The only way for the United States to avoid billions in immediate retaliation is to repeal COOL.”

Ritz’s communications director Jeff English says in an interview the products being considered for retaliatory tariffs are in a list the government made public in June 2013. “The government reserves the right to add to that list.”

Up to 2013, the livestock industry estimated the damages to their sectors at about $1 billion annually. But updated figures that take into account the additional damage caused by the amended labelling law have now pegged the damage at more than $3 billion annually.

Canada and Mexico have challenged the legislation four times at the World Trade Organization (WTO). Decisions handed down in 2011, 2012, 2014 and on May 18, 2015 confirm the original law violates the American’s trade obligations and the amended law, introduced in 2013 after the Americans lost the first case at the WTO, didn’t comply either.

English says the amendment to the labelling law the Americans introduced in 2013 made the damage to Canadian livestock producers “three times worse.”

Ritz and Canadian livestock industry representatives were in Washington D.C. this week meeting with American political and livestock industry leaders. The Canadian Cattlemen’s Association and Canadian Pork Council both support the government’s move seeking WTO authority to apply retaliatory tariffs.

John Masswohl, Cattlemen’s director of government and international relations, says many American senators recognize the labelling law is bad “policy for the United States and want to repeal it.” But others like the law.

“We found there’s a lot of recognition in the United States that this is the end of the line for the United States at the WTO and they have to fix it,” he says.

The problem is with the American senate, he adds. A committee of the House of Representatives has already passed a bill to repeal the labelling law, and that will now go before the entire House for a vote, likely this week.

In its June 4 release the Canadian Pork Council says imports from the United States that could have retaliatory tariffs put on include live cattle, hogs, fresh, chilled or frozen beef and pork, bacon, some cheeses, fresh fruits, processed meats, rice, maple syrup, pasta, certain sugars, tomato ketchup and other non-food items. BF