WASHINGTON (PRNewswire) — The World Trade Organization's (WTO) final ruling Monday against the U.S. Country of Origin Labeling (COOL) rule will cause severe economic harm to U.S. manufacturing and agriculture without immediate congressional intervention, said the International Dairy Foods Association. With this final ruling, Canada and Mexico, America's two largest export markets, will promptly move to institute retaliatory tariffs worth billions of dollars on U.S. food, agricultural and manufactured goods.
Canada and Mexico had challenged the rule for muscle cuts of meat at the WTO, arguing that COOL has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market. The WTO found the United States to be in noncompliance with its international trade obligations. The ruling is a concern to the U.S. dairy industry because of potential retaliation against U.S. dairy exports.
Canada has already issued a preliminary retaliation list targeting a broad spectrum of commodities and manufactured products, including dairy, which would affect every state in the country. Mexico has not yet announced a preliminary retaliation list but has implemented retaliatory tariffs in the past, which may be indicative of future tariff actions.
IDFA has joined with business leaders from all sectors of the American economy in urging immediate congressional intervention to bring the United States into compliance on COOL. In a letter sent to the U.S. Senate last week, the Coalition for COOL Reform urged senators to prepare to act quickly on legislation.
"We need Congress to act immediately to ensure U.S. compliance with its WTO obligations," said Beth Hughes, IDFA director of international affairs. "That's the only way to mitigate the ruling's negative impact on the U.S. manufacturing and agricultural economies, and to save thousands of American jobs."
The International Dairy Foods Association (IDFA), Washington, D.C, represents the nation's dairy manufacturing and marketing industries and their suppliers, with a membership of 550 companies within a $125-billion a year industry. IDFA is composed of three constituent organizations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA's nearly 200 dairy processing members run nearly 600 plant operations, and range from large multi-national organizations to single-plant companies. Together they represent more than 85 percent of the milk, cultured products, cheese, ice cream and frozen desserts produced and marketed in the United States.