Oct 22, 2014 - 4:45pm

UnCOOL: Dispute with Canada, Mexico Could Cost U.S. Manufacturers, Farmers Billions

Senior Vice President for International Policy

A ruling released Monday by the World Trade Organization (WTO) could lead to thousands of lost jobs in U.S. factories and farms unless Congress intervenes. The latest panel report confirms earlier findings: The U.S. Country of Origin Labeling (COOL) rule on muscle cuts of meat violates obligations the United States has accepted as a member of the WTO.

The stakes are high. Canada and Mexico, which brought the dispute, are the two largest markets for U.S. exports. With this ruling in hand, the WTO is now on track to authorize our two North American neighbors to levy retaliatory tariffs against a broad array of U.S. industries including food production, agriculture, and manufacturing.

This is about to get very real: A list 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 www.COOLreform.com.

Some have tried to spin the ruling as a split decision. In fact, the WTO panel found the latest revision to the COOL regulation, which was issued a year ago, to be even more discriminatory than an earlier version. The panel found the United States is violating not just one but two WTO agreements — the Technical Barriers to Trade Agreement and the General Agreement on Tariffs and Trade (1994).

The potential cost goes far beyond the direct threat of retaliation. More than 95% of the world’s consumers live outside the United States. American farmers, workers, and companies won’t be able to tap those markets if we don’t live up to these rules—rules we expect others to follow—rules that the United States did more to write than any other country.

This is why the U.S. Chamber of Commerce and other members of the COOL Reform Coalition are calling 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.

As Senator Chuck Grassley (R-IA), a longtime supporter of COOL, observed earlier this week:

After two negative findings from the WTO, with the second WTO ruling saying that the revised rule from the U.S. Department of Agriculture was actually worse than the original rule, it’s likely time for Congress to go back to the drawing board. Country of Origin Labeling needs to be written and implemented clear of any trade distorting principles. As a member of the world trading community, we have an obligation to be trade compliant, even if we disagree with the rulings.


About the Author

About the Author

Senior Vice President for International Policy

Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy.