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Dairy industry urges for COOL action

Senate urged to find a viable solution to avoid tariffs on U.S. products including dairy.

Jacqui Fatka

October 20, 2015

2 Min Read
Dairy industry urges for COOL action

The dairy industry said it is “critical” that Congress solve the trade dispute over country-of-origin labeling to head off damaging new tariffs on U.S. dairy exports by Canada and Mexico.

In a letter to the Senate, the National Milk Producers Federation, U.S. Dairy Export Council and International Dairy Foods Association expressed “growing apprehension” that retaliatory tariffs are drawing closer under a finding that said parts of the U.S. country-of-origin labeling (COOL) law violate World Trade Organization rules.

A WTO arbitration panel final report regarding COOL retaliation was expected on November 27, 2015, although that date has now been pushed back to allow for translation of the report into multiple languages – a normal step in the process. The arbitration panel is expected to announce a new date shortly.

“(We) urge the Senate to pass legislation to bring the U.S. into compliance with its WTO obligations without further delay,” the dairy groups said.

Last spring, the WTO ruled against the U.S. COOL program, saying that Canada and Mexico could retaliate against U.S. exports in response. American dairy products have been on Canada’s target list for retaliatory tariffs resulting from the ruling.

“Retaliation against dairy products would come at a particularly challenging time for our industry, given the currently depressed global dairy market…” said NMPF, USDEC and IDFA. “Multiple cooperatives have already been faced at times this year with oversupplies of milk, causing them to dispose of excess milk at a loss. Retaliatory tariffs would back up exports further onto the U.S. market during this time of overly abundant milk supplies.”

Any congressional solution, the groups added, must satisfy Canada and Mexico because those two countries would retain their right to retaliate against the United States until a lengthy WTO arbitration process is concluded. “U.S. dairy producers and processors cannot risk getting mired down in that drawn-out process,” they said.

This summer the House passed a full repeal of COOL with widespread support. Senate Agriculture Committee chairman Pat Roberts (R., Kan.) supports a full repeal, whereas his counterpart ranking member Debbie Stabenow (D., Mich.) and Sen. John Hoeven (R., N.D.) have introduce a bill which would make COOL voluntary.

The three groups asked the Senate to work together “to put in place an outcome that Canada and Mexico agree resolves this issue.”

Canada and Mexico said they will only accept a full repeal to avoid imposing tariffs on U.S. products.

Canada has requested authorization to impose tariffs on more than C$3.1 billion per year of U.S. exports. Mexico requested authorization for over US$713 million in retaliatory tariffs. The U.S. has estimated the costs related to COOL arbitration at US$91 million.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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