WTO says Canada and Mexico can impose $1.01bn in retaliatory tarrifs on US over COOL law

The World Trade Organization (WTO) has stated that Canada and Mexico can place $1.01bn in tariffs on US products in retaliation for its country of origin labelling (COOL) law, which the global trade body claims is discriminatory.

COOL had become a law in the US in 2009.

Canada can impose a tariff of approximately $781m on US products, while Mexico can seek around $228m.

In May, the WTO backed its previous decision that the US regulation is discriminatory against Canadian and Mexican livestock farms.

The body said the rules led to "a disproportionate burden on producers and processors of livestock that cannot be explained by the need to provide origin information to consumers."

Canada and Mexico have long been arguing that the COOL ruling severly impacted their livestock export volume to the US.

According to the two US trading partners, US buyers avoided cattle or hogs from Mexico and Canada in order to cut down tracking costs resulting from the COOL law.

Although Canada and Mixico urged the WTO to authorise $3bn in retaliatory tariffs, the global trade body had settled on the amount of $1.1bn after using a different methodology to calculate the COOL impact on the economies of the two countries.

The COOL law was backed by ranching groups and consumer groups in the US, which believe that it will make shoppers avoid buying food from countries that do not have stringent safety rules. However, meatpackers felt that it only led to high costs.

The National Cattlemen’s Beef Association, an industry body group that has a membership of cattle producers and meatpackers, told the publication that the WTO’s ruling should encourage Congress to repeal the COOL ruling.

Legislation has already been passed by the US House to repeal COOL.

However, some farm groups in the US have objected to the WTO ruling. National Farmers Union president Roger Johnson told the publication that WTO’s decision "has undermined US sovereignty and the right of American consumers to know the origin of their food."