A decision by the World Trade Organization (WTO) could cause significant economic repercussions for U.S. manufacturing and agriculture, unless Congress intervenes. Today the WTO released a compliance panel report finding the U.S. Country of Origin Labeling (COOL) rule on muscle cuts of meat violates U.S. international trade obligations.
In response, a broad coalition of U.S. industries called on Congress to immediately authorize and direct the Secretary of Agriculture to rescind elements of COOL that have been determined to be noncompliant with international trade obligations by a final WTO adjudication. If the final ruling finds the U.S. in noncompliance, Canada and Mexico will have the opportunity to retaliate against U.S. goods resulting in lost sales in the billions and put thousands of jobs at risk.
"Canada and Mexico are the two largest markets for U.S. exports," said U.S. Chamber of Commerce Senior Vice President for International Policy John Murphy. "The disruption of these trade ties by WTO noncompliance and the resulting retaliation by our North American neighbors will have a devastating economic impact on U.S. industries including food production, agriculture, and manufacturing."
Canada and Mexico challenged the revised COOL rule in the WTO shortly after the USDA issued a revised rule. They argued that COOL has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market, thus violating the WTO Technical Barriers to Trade Agreement.
The coalition sent a letter to the leaders of the House and Senate Agriculture Committees in June asking members to take action.
"If Congress fails to ensure that U.S. COOL requirements comply with our international obligations, U.S. jobs and manufacturing will be put at risk," said Linda Dempsey, Vice President of International Economic Affairs at the National Association of Manufacturers. "The United States helped create the WTO to ensure that all countries play by the rules. U.S. leadership in complying with our own obligations is critical to the United States' ability to address effectively unfair and WTO-violative trade barriers by our trading partners around the world."
The WTO dispute settlement body adopted the Appellate Body report and the panel report in July 2012 which ruled against a previous version of the COOL rule. It found that the COOL rule treated imported livestock less favorably than U.S. livestock (particularly in the labeling of beef and pork muscle cuts), and did not meet its objective to provide complete information to consumers on the origin of meat products. The international trade body gave the U.S. until May 23, 2013, to bring the rule into WTO compliance. It is that revised rule on which the WTO ruled today and that the coalition is seeking to suspend.
A compilation of products likely to be targeted by Canada and Mexico and the potential economic impact for each state can be found on an interactive map at COOLReform.com.
Source: COOL Reform Coalition