WTO clears the way for Canada and Mexico to impose retaliatory tariffs in COOL decision

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December 14, 2015

            On December 7, 2015, the World Trade Organization (WTO) cleared the way for Canada and Mexico to impose retaliatory tariffs on U.S. exports in the U.S. Country of Origin Labeling (COOL) decision. 
            COOL requires most retailers to provide consumers with the origin of certain agricultural products. Mexico and Canada initiated the WTO dispute settlement in December of 2008. They believed that COOL gave the U.S. an unfair advantage on muscle cuts of meats by reducing the value and number of cattle and hogs shipped to the U.S. market.
            After several years of investigations and appeals, WTO ruled that the program discriminates against Canadian and Mexican exports. Canada is now able to impose tariffs equaling about $800 million on 38 products. These products include agricultural goods, processed foods, jewelry, articles of iron and steel, and furniture. Mexico has not released a specific list of products that will be subject to the retaliatory tariffs, but they will be able to set duties of more than $200 million. It is suspected that Mexico will apply these duties to agricultural goods, beauty and hygiene products, gas masks, and plastic tableware. 
            U.S. agricultural groups have called for compliance with this new ruling to avoid these retaliatory duties.

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