This week, business and agricultural leaders testified before the House Agriculture Subcommittee on Livestock and Foreign Agriculture and spoke to the negative effects of WTO non-compliance on country of origin labeling (COOL) for muscle cuts of meat.
A final determination by the WTO on whether U.S. COOL requirements are in compliance with international trade obligations is expected in May. If then, the U.S. is found to be non-compliant, Canada and Mexico would be authorized to implement billions of dollars' worth of retaliatory tariffs on U.S. food, agricultural and manufactured goods.
"Canada and Mexico are by far the United States' largest export markets, and purchased a record $485 billion in manufactured goods in 2014," said Linda Dempsey of the National Association of Manufacturers. "WTO-authorized retaliation by two of the largest U.S. trading partners could result in very substantial tariffs affecting multiple sectors of the U.S. economy, threatening the livelihoods of American families."
The resulting damage to exports will be felt across the U.S. economy, and will greatly exceed the final retaliation amount that the WTO authorizes. Additionally, thousands of U.S. jobs are at risk. According to Professor Dermot Hayes of Iowa State University, a $2 billion retaliation could cost the U.S. economy 17,000 jobs.
"The only way to avert costly retaliation is for Congress to approve legislation repealing the COOL rule for muscle cuts of meat," said Christopher Wenk of the U.S. Chamber of Commerce. "Failure to act on COOL could cost tens of thousands of American jobs and jeopardize mutually beneficial trade relationships with our two closest neighbors and largest export markets."
A compilation of products likely to be targeted by Canada and Mexico, and the potential economic impact for each state, can be found on an interactive map at COOLReform.com.