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Audio: COOL Ruling could have Consequences for U.S. Exports

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The World Trade Organization is expected to issue a final ruling soon on Mexico and Canada’s challenge of U.S. country-of-origin labeling (COOL) regulations for red meat. A ruling against the U.S. could give Canada and Mexico the green light to impose retaliatory tariffs on imports of some U.S. products.

Chad Russell, U.S. Meat Export Federation (USMEF) regional director for Mexico, Central America and the Dominican Republic, discusses the process that will take place if such a ruling is issued, and the potential for U.S. pork and beef to be included on the list of products affected by retaliatory tariffs. He notes that U.S. pork was one of the products targeted in the NAFTA trucking dispute with Mexico in 2011, and even the moderate tariffs imposed at that time had an impact on U.S. market share.

In 2014, U.S. pork exports to Mexico were 680,843 metric tons valued at $1.55 billion. First-quarter 2015 exports topped last year’s record pace by 7 percent in volume, reaching 179,507 metric tons. Last year’s beef exports to Mexico totaled 242,566 metric tons valued at $1.17 billion. First-quarter exports were slightly below last year’s pace in volume but 4 percent higher in value at $285 million. .

TRANSCRIPT:

Ralph Loos: The World Trade Organization is expected to issue a final ruling soon on Mexico and Canada’s challenge of U.S. country-of-origin labeling rules for red meat. In this U.S. Meat Export Federation report, Chad Russell, USMEF regional director for Mexico, Central America and the Dominican Republic, discusses the process that’s likely to unfold if the ruling goes against the United States.

Chad Russell: I recently met with officials in the Economia, which is the part of the Mexican government that handles these types of trade issues. I had several conversations over the past many months. Mexicans reserve the right to retaliate if that right were given to them on the WTO. There would be a period of time where the Mexicans and the Canadians would have to demonstrate to the WTO the damage they have incurred because of the U.S. policy. So it probably wouldn’t be until sometime in September whereby Mexico and Canada would be given the right to retaliate.

Ralph Loos: U.S. red meat exports could be targeted for retaliation, as was the case with U.S. pork in a recent trade dispute with Mexico.

Chad Russell: A similar situation was given to them with respect to the NAFTA agreement, where the U.S. wouldn’t allow Mexican trucks into U.S. territory. The Mexicans were exceedingly patient exercising that right to retaliate. My sense is that they will not be as patient this time as before. I’m not sure which products would be put on there, but if the NAFTA trucking issue is any indication, pork products could very well be included on that list, because there is political pressures in Mexico by the pork producers historically, at least, to try to mitigate imports from the United States, which creates competition for them. Canada is the primary third party competitor. In the case of the NAFTA trucking issue, duties were put on U.S. product and not on Canadian products. Canada took share from the U.S. when our exports to Mexico dipped. It’s the only time they’ve dipped since 2008.

Ralph Loos: For more on this and other trade issues, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Ralph Loos.