We previously wrote that an upcoming decision of the Appellate Body of the World Trade Organization (WTO) regarding country-of-origin labelling (COOL) requirements in the United States could have a serious impact on U.S.-Canada trade.
In its decision, released on May 18th, 2015, the Appellate Body has rejected an appeal from the United States and upheld the October 2014 compliance panel finding that U.S. revised country-of-origin labeling (COOL) rules for importation of meat from Canada and Mexico are inconsistent with Article 2.1 of the Agreement on Technical Barriers to Trade (TBT). The Appellate Body’s decision must be adopted by the WTO Dispute Settlement Body following which Canada will be able to request authorization from a WTO arbitrator to determine the damage caused by the COOL rules to Canadian exports of meat. Thereafter, Canada will be free to request formal authorization to retaliate. Canada has previously indicated that it will impose a 100% surtax on a broad cross-section of U.S. imports, with particular emphasis on the food and beverage sector.
You can read about the details of the appellate decision and Canada’s proposed retaliatory tariffs here.