Last Updated: July 31, 2014
Topic: Country-of-Origin Labeling (COOL)
In 2009, the U.S. passed legislation requiring country-of-origin labeling on meat and meat products to better inform consumers of the supply chain origins. In 2011 Canada and Mexico brought a dispute before the World Trade Organization against U.S. COOL requirements. In May of 2013 the U.S. implemented new regulations in an effort to comply with WTO obligations; Canada and Mexico contend the new requirements are now even more onerous than before. The WTO is expected to make a ruling in 2014 to determine whether current U.S. measures are WTO-compliant. Retaliatory tariffs are expected to be implemented late 2014/early 2015, only if the WTO (a) finds the U.S. is not in compliance, and (b) authorizes Canada to retaliate.
If Canada retaliates against the United States in the COOL dispute to implement the proposed 100 percent surtax on U.S.-origin goods, more than $535 million of U.S. exports to Canada of chocolate confectionery, chocolate ingredients and sugar-free sweeteners will cease. Many American-made chocolate products will become cost-prohibitive and de facto kept out of the Canadian market. Manufacturers in Canada that source critical raw materials from U.S.-based suppliers will shift supply chains outside of the United States.
NCA and the confectionery industry support legislative efforts that will ensure compliance with international trade obligations and therefore avoid retaliatory actions against U.S.-origin goods. NCA is a member of the COOL Reform Coalition, comprised of more than 60 food and agricultural organizations with products are on Canada’s retaliatory list. The Coalition is urging Congress to take action on COOL to prevent billions of dollars in regulatory tariffs against the United States.