A World Trade Organization’s (WTO) compliance panel report finding that the U.S. country-of-origin labeling (COOL) revised rule violates international trade obligations could result in retaliation by two of the U.S. largest trading partners, according to the International Dairy Foods Association (IDFA).
The COOL rule requires most retailers to provide country-of-origin labeling for fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng, meat and poultry.
Canada and Mexico had challenged the rule in the WTO, claiming it has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market. Backed by the finding, Canada and Mexico may retaliate against a wide range of U.S products, including dairy products, with high, burdensome tariffs, IDFA warned.
IDFA is a member of the COOL Reform Coalition, which promotes reforms to the COOL requirements to ensure they are compliant with international trade obligations. In a statement, the coalition said the ruling “could cause significant economic repercussions for U.S. manufacturing and agriculture, unless Congress intervenes.”
The coalition called on Congress to immediately authorize and direct the Secretary of Agriculture to rescind elements of COOL that have been determined to be noncompliant by WTO.
IDFA anticipates that the United States will appeal the latest decision, with final adjudication by the WTO expected as early as mid-2015. If the final ruling finds the U.S. in noncompliance, Canada and Mexico will have the opportunity to retaliate against U.S. goods.
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.
For more information, visit COOLReform.com.