Trade Groups Ramp Up Pressure for Congressional Action on COOL
U.S. business and trade advocacy coalitions are digging in on their demand for Congress to immediately grant the Secretary of Agriculture the authority to rescind parts of the country-of-origin (COOL) labeling regime that the World Trade Organization says violates global trade rules. The WTO ruled on Oct. 20 the COOL regulations on meat muscle cuts favor U.S. industry and are inconsistent with cornerstone WTO agreements on tariffs and technical barriers on trade (see 1410200033). The U.S. will have 30 days to appeal the ruling, and if that does not happen, the WTO is afforded 60-90 days to adopt the Oct. 20 report, said industry group executives on an Oct. 20 conference call.
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U.S. lawmakers must change the COOL laws quickly or Canada and Mexico, the two complainants in the dispute, will put into place costly retaliation, said the speakers on the call, which included executives from the U.S. Chamber of Commerce, the National Association of Manufacturers (NAM). Canadian and Mexican retaliation could costs U.S. manufacturers billions in lost duty preferences, said Jessica Lemos, director of international trade policy at NAM. “We see retaliation against manufactured goods made in America as an unacceptable outcome at a time when manufacturing is still striving to bounce back from the great recession,” Lemos said on the call. “Along U.S. manufactured goods, our agricultural products are threatened by this finding. Without immediate action to settle this dispute, the governments of Canada and Mexico could impose $2 billion in tariffs that would deal a serious blow to our economy and endanger thousands of American jobs.”
The WTO ruled against U.S. COOL regulations in 2011, and the 2013 USDA updates to the regime not only fell short of correcting the portions that violate WTO rules, but actually made the COOL regime less compliant with trade rules, said the speakers on the call. The Canadian government in June 2013 published its list of goods that could be subject to retaliatory tariffs authorized by the WTO report, which includes jewelry, swivel seats and wooden furniture, among other manufactured goods. Mexico has not yet published its retaliation list, but those on the call said it would likely mirror its retaliation list in a recent WTO dispute involving cross-border trucking.
Mexico retaliated against 99 U.S. tariff lines in 2009-10, which targeted a broad range of agriculture and other products, totaling more than $2.4 billion (here). “In short, [COOL retaliation] could cover just about every aspect of American agriculture, including our meat sector,” said Chuck Conner, president of the National Council of Farmer Cooperatives. “It is our hope we can see action by our political leaders to address this WTO ruling in very short order and bring the United States into compliance with our obligations.” Such legislation could be tacked onto an appropriations measure or move independently, said the speakers.