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U.S. May Avoid $1 Billion in Trade Sanctions in Meat Origin Labeling Dispute

Thursday, December 17, 2015
Sandler, Travis & Rosenberg Trade Report

Congress could soon act to repeal mandatory country of origin labeling requirements for meat products, which could stave off an estimated $1 billion in retaliatory trade sanctions that Canada and Mexico have threatened to impose as early as Dec. 18.

The House of Representatives passed a bill in late June to repeal mandatory COOL requirements for beef, pork and chicken, but similar legislation had stalled in the Senate as some senators worked to find a way to comply with a World Trade Organization ruling against the COOL rules short of a full repeal. In the meantime a WTO arbitration panel authorized a total of more than $1 billion in retaliatory sanctions, which are expected to take the form of higher import tariffs on U.S. goods such as agricultural products, furniture, machinery and home appliances. Those sanctions could be imposed as early as Dec. 18, when the WTO is expected to formally adopt the arbitration panel’s award.

However, a provision repealing COOL for beef and pork (not chicken, which was not at issue in the WTO dispute) has been included in the fiscal year 2016 omnibus appropriations bill that both the House and Senate are expected to take up in the next few days. Though congressional action may not be completed until after Dec. 18, it is possible that Canada and Mexico could delay their sanctions if they feel that a repeal is imminent.

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