On June 4, 2015, Canada requested authorization from the World Trade Organization (WTO) to impose over $3 billion in retaliatory measures against U.S. exports to Canada (the amount of annual damages caused by COOL to the Canadian cattle and hog industries). At the June 17 meeting of the WTO Dispute Settlement Body, the U.S. Government disputed the amount of damages claimed by Canada and requested arbitration.
Under WTO rules, the arbitration process is to be completed within 60 days after the date of the composition of the arbitral panel (expected in the coming weeks). Therefore, it is expected that the arbitration process will be completed by late September or early October of 2015, after which Canada would have legal authority to proceed with retaliation against an annual value of trade equivalent to the level of damages determined by the WTO arbitral panel.
Possible Government of Canada trade retaliation
Canada is calling on the United States to repeal COOL’s provisions against beef and pork. If a compensation agreement cannot be reached by the time the WTO arbitral panel issues their decision, Canada is prepared to react by levying a 100% surtax on imports of selected products from the United States. Some of the products that may be targeted are: fresh meats, food products, chemicals, jewelry, metal products, and furniture to name a few.
Canada will review and amend the list of products that will be subject to the surtax (drawn from the products listed in the June 2013 Canada Gazette notice). Stakeholders are encouraged to submit their views and concerns with respect to the specific products in writing to COOL-EPO@fin.gc.ca.
A final list of the products subject to retaliation along with the corresponding tariff items would be provided at the time of implementation of the surtax.
U.S. House lawmakers moved to repeal the COOL bill. The U.S. Senate Agriculture Committee will hold a hearing on COOL on June 25. Should the United States repeal the COOL legislation before the WTO decision, the 100% surtax will not be imposed.
The U.S. Department of Agriculture, Agriculture Marketing Service (USDA/AMS) implemented a final rule effective May 23, 2013, to modify the labelling provisions for muscle cut meats covered under the Country of Origin Labeling (COOL) program.
This measure has forced the livestock industry in Canada and other countries that trade with the U.S. to go through a lengthy labelling and tracking system with an unnecessary paperwork burden and additional red tape.
Please contact a Livingston representative should you have any questions.