THE World Trade Organization will hold a meeting next month to consider the retaliatory tariffs Canada and Mexico are proposing against the U.S. for its country-of-origin-labeling (COOL) policy.

The meeting of the WTO Dispute Settlement Body will be held Sept. 15-16 in Geneva, Switzerland.

Canada and Mexico are seeking more than $3 billion in retaliatory tariffs on U.S. goods after the WTO Appellate Body ruled in May that the U.S. mandatory COOL law and regulations are in violation of international trade obligations and illegally discriminate against imported livestock from Canada and Mexico.

The Office of the U.S. Trade Representative filed a legal brief disputing the level of retaliation sought by Canada and Mexico, calling it a "dramatic overestimation of damages."

The U.S. requested that the WTO arbitrator reject the amounts proposed by Canada and Mexico and instead set the totals at no more than $43.22 million and $47.55 million, respectively.

The Canadian Cattlemen's Assn. (CCA) noted that the U.S. estimate ignores any valuation related to segregation of cattle, transportation issues or price suppression in the Canadian market.

"Given that the WTO has already found these issues to be at the core of the COOL violation, the CCA feels confident that our calculations will be strongly considered by the arbitrators," CCA said.

In a column from Daryll Ray and Harwood Schaffer of the University of Tennessee's Agricultural Policy Analysis Center, they pointed out that the U.S. accused Canada of using a "results-driven methodology" to determine its losses, which makes it biased and severely overestimates the trade impacts.

"Unless the arbitrator completely throws out the argument made by the U.S., it would appear that the final level of damages will come in well below the $3.8 billion Canada and Mexico are asking for," they explained. "Whether or not that will make a difference in the halls of Congress is another matter."

The House has already approved a measure to fully repeal COOL as a way to avoid any retaliation before WTO approves it.

Earlier this summer, Sen. Pat Roberts (R., Kan.) introduced a measure in the Senate that also seeks a repeal of COOL.

Then, in late July, Sens. Debbie Stabenow (D., Mich.) and John Hoeven (R., N.D.) introduced a bill that would repeal mandatory COOL and replace it with a voluntary labeling provision.

The proposal was swiftly rejected by the governments of Canada and Mexico because the senators' proposal is "voluntary in name only and maintains many of the segregation provisions struck down by the WTO," according to CCA.

Alejandro Gomez, legal representative for CNOG, Mexico's cattle producer association, said Mexico wants nothing short of full repeal. Mexico is prepared to retaliate and will defend the $713 million-per-year figure at the WTO meeting, he said.

Instead of publicizing a list of possible retaliation targets, CNOG and Mexican officials have approached individual leaders in Congress and hand delivered lists of items for retaliation.

Volume:87 Issue:32