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Retaliatory Tariffs over the WTO’s COOL Finding Draw Closer

November 6, 2015

The clock continues to tick on the potential imposition of retaliatory tariffs in response to the World Trade Organization’s finding that parts of the U.S. country-of-origin labeling law violate international trade rules. 

For that reason, NMPF joined with the U.S. Dairy Export Council and the International Dairy Foods Association in urging Congress to solve the dispute as soon as possible to head off damaging new tariffs on U.S. dairy exports. “(We) urge the Senate to pass legislation to bring the U.S. into compliance with its WTO obligations without further delay in order to head off this significant threat to U.S. dairy exports,” the groups said.

Last spring, the WTO ruled against the U.S. COOL program, saying that Canada and Mexico could retaliate against U.S. exports in response. American dairy products have been on Canada’s target list for retaliatory tariffs resulting from the ruling.

“Retaliation against dairy products would come at a particularly challenging time for our industry, given the currently depressed global dairy market…” NMPF, USDEC and IDFA said. “Multiple cooperatives have already been faced at times this year with oversupplies of milk, causing them to dispose of excess milk at a loss. Retaliatory tariffs would back up exports further onto the U.S. market during this time of overly abundant milk supplies.”

Any congressional solution, the groups added, must satisfy Canada and Mexico because those two countries would retain their right to retaliate against the United States until a lengthy WTO arbitration process is concluded. “U.S. dairy producers and processors cannot risk getting mired down in that drawn-out process,” they said. The three groups asked the Senate to work together “to put in place an outcome that Canada and Mexico agree resolves this issue.”