WTO authorizes Canada, Mexico to impose $1B in tariffs on U.S. products

OTTAWA—The United States must immediately repeal its discriminatory meat labelling provisions or face Canadian retaliation, two Liberal cabinet ministers said Monday.

The ultimatum came from International Trade Minister Chrystia Freeland and Agriculture Minister Lawrence MacAulay after the World Trade Organization ruled Monday that Canada and Mexico can impose more than $1 billion in annual retaliatory on tariffs on U.S. products.

This latest win for Canada at the WTO came in a long-running saga focused on how the United States labels packaged steaks and other meats, and was welcomed by Canada’s beef and pork producers.

The Republican chair of the U.S. Senate’s agricultural committee agreed with the Canadian position, and said he will push for the lifting of the American “rules of origin” labelling provisions, which the WTO has previously said leaves Canadian and Mexican meat products at a disadvantage.

Canada had been expecting Monday’s favourable decision because the WTO ruled in May that the American labelling, known as COOL, violated its international trade obligations.

The U.S. House of Representatives repealed the provisions in June. The U.S. can’t appeal the WTO decision.

Freeland and MacAulay called on the Senate, where some Democrats support the labelling provision, to follow suit.

Or else.

“We’re calling on the senate to repeal now,” said Freeland.

“We are a trading nation. We believe in free trade. But free trade only works when everyone follows the rules.”

Added MacAulay: “Now they repeal COOL, or we retaliate – we will retaliate.”

Freeland and MacAulay said Canada has taken the next step in doing just that by filing formal notice with the WTO that it will pursue the punitive tariffs, which could kick in before the end of the month.

Republican Sen. Pat Roberts, the agriculture committee chair, urged his fellow lawmakers to finally do away with the COOL provisions.

“The WTO has warned us multiple times, and Congress has ignored the warning. This is no longer a warning. Retaliation is real. Now more than ever, we need to repeal COOL,” Roberts said.

Ranchers in northern U.S. states that compete with Canada pushed for the labelling law.

But Roberts said Monday it is time for them to throw in the towel.

“How much longer are we going to keep pretending retaliation isn’t happening? Does it happen when a cattle rancher, or even a furniture maker, is forced out of business?”

The Canadian Cattlemen’s Association, the Canadian Pork Council, the National Feeders’ Association and Canadian Meat Council added their collective voices to the call on the U.S. to scrap the labelling provisions in light of the decision.

“Our patience is exhausted,” their joint statement said.

“There is no further negotiation to be done and no compromise is acceptable. Canadian livestock producers and meat processors expect the U.S. to do nothing less than repeal COOL or face the immediate imposition of retaliatory tariffs on U.S. goods to the same extent as the damage we have endured.”

The ruling allows Canada to impose $780 million in retaliatory tariffs and Mexico $228 million.

Like Canada, Mexico also filed notice Monday with the WTO that it intends to pursue the tariffs.