On Dec. 7, the World Trade Organization (WTO) issued a ruling establishing damages in the dispute regarding U.S. country of origin labeling (COOL) regulations for meat. Canada sought authorization for about $2.25 billion in retaliatory tariffs, but the WTO set a lower figure of $777 million. Mexico requested $653 million in retaliation, but the authorized amount was set at $227.8 million.

Philip Seng, President and CEO of the U.S. Meat Export Federation (USMEF), says that while the combined $1 billion in retaliation is far less than Canada and Mexico were seeking, retaliatory duties can still be a significant obstacle for red meat exports – especially during this time of adverse exchange rates and intense competition.  

Seng explains that both the Mexican peso, which recently hit record lows, and the Canadian dollar are down about 15 percent year-over-year versus the U.S. dollar. U.S. exports face growing competition in the Mexican market from Canadian beef and especially from Canadian pork. Like U.S. meat products, they enter Mexico duty-free under NAFTA, and the Canadian pork industry has been particularly aggressive in Mexico since losing access to the Russian market (its third-largest at the time) in August 2014.

Canada is also an increasingly competitive beef and pork market. Canada’s imports of European pork are up dramatically this year and it recently authorized beef imports from 19 European countries.