THE TTALK QUOTES 

On Global Trade & Investment

 

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No. 2 of  2016

WEDNESDAY, JANUARY 6, 2016

Filed from Portland, Oregon

Click here for Monday's quote on Turkey's threat of increased trade cases against the United States


COOL AND THE CHRISTMAS CADEAU

"If the [U.S. Country of Origin Labeling] legislation is repealed, there will be no need to retaliate, but ... we do need to have the legislation repealed."

Chrystia Freeland
December 17, 2015
CONTEXT
The Honourable Chrystia Freeland is Canada's Minister of International Trade in the still relatively new Liberal government of Prime Minister Justin Trudeau.  In mid-December she was in Nairobi for the WTO's 10th Ministerial Conference.  Doug Palmer of Politico caught up with her there and asked her about COOL - the country of origin labeling scheme that has been a significant irritant in U.S. trade relations with both Canada and Mexico since 2008.   Today's quote is from the December 17 edition of Politico's excellent Morning Trade.

What follows here is well known to those who care about this issue.  It is simply our way of putting a final note in this folder before filing it on the "Action Completed" shelf.

The labeling requirements at issue are found in the Agriculture Marketing Act of 1946 as amended, although the contentious section on Country of Origin Labeling is much newer.  It applies, or applied, to beef, ground beef, lamb, pork, chicken, goat, and venison meat, as well as certain other products including fish and nuts.   On December 17, it seemed a fair bet that, as a practical matter, the provisions that had led to all those trade cases were on their way to being repealed. 

The U.S. House and Senate were then deep into the process of agreeing on an omnibus spending bill - the Consolidated Appropriations Act of 2016, H.R. 2016 - that, among other things, included language addressing elements of COOL that Canada and Mexico have been complaining about for years. 

President Obama signed the bill the next day, December 18, and it is now Public Law 114-113.  In the sense that Minister Freeland meant it, it is fair to say that COOL has been repealed.  That's because Canada, like Mexico, was concerned primarily with how the law dealt with beef and pork.  Those products are now out of the law and off the table.  On the other hand, the underlying legislation was not repealed.  It is still there.  What the Consolidated Appropriations Act did was to strip out beef, ground beef, and pork from the list of products covered by COOL.

So the issue has been resolved, and America and her North American neighbors dodged some nasty bullets.  Both Canada and Mexico were on the brink of retaliating against more than $1 billion in U.S. exports.  And, for good measure, they still have the WTO's blessing to retaliate should they see a need to do so. 

As CTV News put it in a story on December 18, "Canada still intends to obtain formal approval next week from the WTO for retaliation, even though the tariffs won't be imposed."  

The same story quoted Minister Freeland saying, "We think it is prudent of us to take the legal process to its formal, technical conclusion."

COMMENT
We have muddied the waters a little with the above description of events.  That is justifiable in the sense that the picture is not quite as rosy as it would have been if the United States had acted sooner.
 
And yet, at least for the time being, this issue has been resolved.   When the Canadian Cattlemen's Association - a group that has been fighting against COOL for the last seven years - says it is "elated," it would be churlish to quibble.  Rather, one should breathe a sigh of relief.  We assume that has been the reaction for all of those industries whose exports were under threat of retaliation, from wine to furniture and from health and dairy products to pork. 

The National Pork Producers Council was an especially active and effective voice for repeal this past year and with good reason.   In their December 18 press release they talked about COOL repeal and rightfully praised those lawmakers who worked hardest for it. We'll close with this paragraph from that release:

"America's pork producers are grateful that lawmakers, particularly Chairman Roberts and Chairman Conaway, recognized the economic harm we faced from retaliation because of the WTO-illegal COOL law," said NPPC President Dr. Ron Prestage, a veterinarian and pork producer from Camden, S.C. "I know tariffs on U.S. pork would have been devastating to me and other pork producers."
SOURCES & LINKS
 Politico from Nairobi is a link to the Morning Trade for December 17, 2015, which was the source for today's featured quote.

The Consolidated Appropriations Act takes you to the page for this legislation on the Congress.Gov website.

Canada's Cattlemen Elated is the December 18, 2015, press release on COOL from the Canadian Cattlemen's Association.

Trade War Averted is the CTV News article with the quote from Minister Freeland on retaliation authority from the WTO.

Pork Producers Say Thank You is the December 18, 2015 press release on this topic from the National Pork Producers Council.

 

 

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