WTO Says Canada, Mexico Can Slap $1 Billion in Tariffs on U.S. Over Meat Labels
The decision caps a yearslong battle over country-of-origin labeling rules
The U.S. requires packages of beef, pork and other meat products to disclose where animals were born, raised and slaughtered. Photo: Associated Press
By Kelsey Gee and Paul Vieira
The World Trade Organization on Monday said Canada and Mexico can impose $1.01 billion in retaliatory tariffs on U.S. goods for meat-labeling rules that it says discriminate against livestock from the U.S. trading partners.
The decision caps a yearslong battle over country-of-origin labeling rules, known as COOL, in which the U.S. requires packages of beef, pork and other meat products to disclose where animals were born, raised and slaughtered. The rule became law in 2009.
Canada can slap about $781 million in tariffs on U.S. products and Mexico can apply about $228 million, the WTO ruled on Monday. The organization in May upheld its earlier decision that the U.S. regulations, based on a 2009 law, discriminate against Canadian and Mexican livestock. The global trade body at the time said the rules imposed “a disproportionate burden on producers and processors of livestock that cannot be explained by the need to provide origin information to consumers.”
The Canadian and Mexican governments argued the law led to reduced exports of livestock to U.S. cattle feedlots and slaughterhouses. They said buyers either avoided cattle or hogs originating in those countries to bypass tracking costs that COOL stipulated, or agreed to purchase the animals at lower prices.
The Canadian and Mexican governments had asked the WTO to authorize around $3 billion in retaliatory tariffs, but the WTO calculated the impact to the Canadian and Mexican economies using a slightly different methodology.
Canada has said possible targets for its retaliatory tariffs include food items ranging from frozen orange juice to ketchup to beef. Also on the list are stainless steel pipes and tubes, swivel chairs and mattresses.
U.S. consumer groups have long argued that country-of-origin labels can help shoppers avoid food from countries with lax safety regulations. The labeling effort, which gained traction in Congress in the early 2000s after mad-cow disease was found in British cattle, drew support from some U.S. ranching groups. But meatpackers said the regulations imposed unnecessary burdens and costs.
National Cattlemen’s Beef Association, a group that represents both cattle producers and big meatpackers such as JBS SA and Tyson Foods Inc., TSN 1.56%said the WTO’s conclusion should encourage Congress to repeal the labeling law. The U.S. House has passed legislation to repeal it.
“America’s cattlemen and women produce the best beef in the world, but we do not support this mandate from the federal government to market our product,” said Philip Ellis, president of NCBA.
Some U.S. farm groups decried the decision. The trade authority’s decision “has undermined U.S. sovereignty and the right of American consumers to know the origin of their food,” said Roger Johnson, president of National Farmers Union, a Washington-based organization that represents farmers and ranchers.
Canadian Trade Minister Chrystia Freeland said Monday’s decision represented one of the most significant favorable rulings the trade-dependent country has ever won at the WTO. She said Canada now is waiting for the U.S. Senate to follow the House’s lead.
“This means retaliation is now a reality,” Ms. Freeland said in an interview. “We very much believe the senators will now see that the law is on our side, and will repeal this legislation that discriminates against Canadian producers.”
U.S. Sen. Debbie Stabenow (D., Mich.) in June proposed a bill that would repeal mandatory country-of-origin labeling and make the disclosure voluntary, which she described as a “common-sense compromise.”
“It is critical that we work together to find a solution before the end of the year” to prevent retaliation, Ms. Stabenow said Monday.
Tim Reif, general counsel for the Office of the U.S. Trade Representative, said the agency was disappointed with the WTO’s decision, adding that “if Canada and Mexico take steps to raise import duties on U.S. exports, it will only harm the economies of all three trading partners.”