December 8, 2015

WTO approves US$1 billion tariffs in response to US meat labelling rules

The World Trade Organization (WTO) has ruled that Canada and Mexico can impose more than US$1 billion in tariffs on US goods in retaliation for meat labelling rules - it believes - discriminate against Mexican and Canadian livestock.

In 2008, the US Congress made Country-of-Origin Labelling (COOL) mandatory for beef, pork and lamb products, requiring meat be labelled with the name of the country from where the animal was born / hatched, raised and harvested. During conference committee negotiations, chicken was incorporated into the legislation voluntarily.

"I am keenly aware that chicken and fowl could be at the top of the list for retaliation by Canada and Mexico, and that this labelling law continues to leave the door open for retaliatory action by other countries, too," said Mike Brown, the president of National Chicken Council (NCC) in response to the December 7 announcement by the WTO. "NCC supports legislative action that will bring US laws and regulations pertaining to meat and poultry into full compliance with our international trade obligations. NCC urges Congress to repeal the labelling provision for chicken, beef and pork (immediately)."

USDA has repeatedly tried to address the WTO's concerns about the COOL statute, but the regulations remain unacceptable and illegal in WTO's view.  As a result of the announcement, Canada and Mexico are poised to retaliate against over US$1 billion of US exports.

The WTO ruling is currently not open to further appeals and is expected to receive formal approval by the WTO's dispute settlement body later this month, according to reports. 

Without legislation to repeal COOL, retaliations will begin in mid-December. The US House of Representatives in June voted - by a 300-131 margin - to repeal the meat labelling provisions, but the Senate has yet to act on the matter.

Canada and Mexico are two of the US chicken industry's largest trading partners. The US exported US$1.23 billion worth of chicken meat to Canada and Mexico in 2014, representing 27.3% of the value of all of US exports for the year.

"Losing access to two of our key export markets would be a devastating blow to US chicken farmers and producers," Brown concluded.