As seems to be the case with Congress today, only a deadline will bring action. In that regard, we have a serious deadline quickly approaching for the United States to come into compliance with obligations it has undertaken as a member of the World Trade Organization (WTO) regarding country-of-origin labeling (COOL) requirements for muscle cuts of meat. The fact is, the United States is out of options to reform COOL, and the Senate must take action immediately.
Why the urgency? On four earlier rulings, the WTO found that COOL requirements violate U.S. trade obligations. On the final U.S. appeal, the WTO authorized Canada and Mexico to impose retaliatory tariffs.
Earlier this week, a WTO arbitration panel heard from the United States, Canada and Mexico for the exclusive purpose of determining the level of retaliation. Together, Canada and Mexico have requested authorization to impose retaliatory tariffs of $3.2 billion. This would inflict long-term damage to our export markets and could result in lost jobs across the country as market share for an array of products is lost to foreign competitors. Once the panel releases its determination on the level of damages later this fall, Canada and Mexico will be free to impose retaliatory tariffs on a broad swath of U.S. exports. Our global competitors could not be happier.
This is not the time to continue internal debates about the merits of COOL, as some advocate. That time has passed. It is crucial to understand that at this point, Canada and Mexico alone have the discretion to impose or not impose retaliatory tariffs. Both countries have said that they support repealing the violative portions of COOL, making repeal the one guaranteed path to prevent retaliation.
Furthermore, now is not the time to be placing new barriers on U.S. exports. Already, 2015 U.S. goods exports to Canada and Mexico are down $13 billion compared to the first half of last year due to broader economic challenges. Having U.S. exports also bear the burden of retaliatory tariffs will accelerate that decline with substantial negative impacts on a wide variety of manufacturers and other businesses throughout the U.S. economy.
That is why finding a solution that addresses the concerns of Canada and Mexico and avoids retaliation must be the priority. Some interested parties have proposed alternatives that would alter the law but in practice perpetuate the very same trade barriers to which Canada and Mexico have objected. Canada and Mexico have rejected these proposals and stated unambiguously that they would institute retaliatory tariffs even if such a proposal was passed and signed into law.
On the other hand, Sen. Pat RobertsCharles (Pat) Patrick RobertsMcConnell gets GOP wake-up call Bob Dole, Pat Roberts endorse Kansas AG Derek Schmidt for governor Ex-Sen. Cory Gardner joins lobbying firm MORE (R-Kan.) has proposed to repeal COOL requirements for beef, pork and chicken. The Senate would be wise to consider this proposal before Canada and Mexico institute retaliatory tariffs against American-made products exported to those countries.
The deadline is quickly approaching. To protect American jobs and avoid billions in retaliatory tariffs, the Senate must act to bring the United States into compliance with its trade obligations.
Murphy is senior VP of International Policy, U.S. Chamber of Commerce. Dempsey is VP of International Economic Affairs, National Association of Manufacturers.