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Retaliatory Sanctions in Origin Labeling Dispute Go to WTO Arbitration

Monday, June 22, 2015
Sandler, Travis & Rosenberg Trade Report

U.S. goods shipped to Canada and Mexico are safe for a few more months from higher import tariffs expected to be imposed in the wake of a World Trade Organization ruling against U.S. mandatory country of origin labeling requirements for meat products. Canada has requested WTO authorization to levy retaliatory sanctions against roughly $2.5 billion worth of U.S. goods per year, but the U.S. objected on the grounds that this amount is “excessive.” The matter was subsequently sent to an arbitration panel, which is expected to return a decision within 60 days. Mexico has postponed its request for sanctions authorization after increasing the value of the concessions to be suspended from $653 million to $713 million per year.

In the meantime Congress has taken no further action after the House of Representatives voted June 10 to repeal the COOL requirements. Some senators are looking for a way forward that does not involve repeal, and the arbitration process provides additional time to do that before potential sanctions kick in.

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