GENEVA/WASHINGTON (Reuters) – The United States faces potential trade sanctions from Canada and Mexico after the World Trade Organization (WTO) ruled on Monday it had failed to bring its meat labeling regulations fully in line with international fair trading rules.
The WTO said the United States had not done enough to change its labeling rules, requiring retailers such as grocery stores to list the country of origin on meat, after it lost an earlier WTO challenge. Canada and Mexico called on the United States to repeal the rules and said they were prepared to retaliate if needed against US exports. Previous estimates have put the cost of tariffs as high as $2 billion.
“Canada and Mexico will remain vigilant to ensure the harm generated by the protectionist … policy is brought to an end and that international trade commitments are respected,” the two countries’ trade and agriculture ministers said in a statement.
US pork producers urged Congress and the administration to fix the rules and avoid “financially devastating” retaliation, while the US Chamber of Commerce, National Association of Manufacturers, farmer cooperatives and corn refiners said the offending sections should be immediately rescinded. Beef producers said the whole policy should be scrapped.
“The announcement today by the WTO dispute panel on the US Country of Origin Labeling rule brings us all one step closer to facing retaliatory tariffs from two of our largest trading partners,” said National Cattlemen’s Beef Association President Bob McCan.
The WTO ruled in June 2012 that the US meat labeling program, known as country-of-origin labeling (COOL), unfairly discriminated against Canada and Mexico because it gave less favorable treatment to beef and pork imported from those countries than to US meat, which is illegal according to WTO rules.
The United States said it had met a deadline to change its rules, but Canada and Mexico said it had not done enough, a claim that was at least partially upheld by Monday’s ruling.
Under the regulations, US meat carries labels such as “Born, Raised and Slaughtered in the United States”, compared to labels such as, “Born in Mexico, Raised and Slaughtered in the United States.”