The World Trade Organisation (WTO) has ruled that Canada and Mexico could impose tariffs worth $1bn on goods from the US in response to the latter's COOL law.
The global trade body stated that the US meat labelling law is discriminatory against livestock of the two US trading partners.
This ruling has brought an end to a long fight over the rules on country of origin label [COOL].
The US COOL rule requires packages of beef, pork and other meat products to indicate information about the origin of the animals, which includes where they were born, raised and slaughtered, reported The Wall Street Journal.
Earlier too, WTO had stated that COOL led to discrimination against Canadian and Mexican livestock.
The WTO had then said: "A disproportionate burden on producers and processors of livestock that cannot be explained by the need to provide origin information to consumers."
As per the latest ruling, Canada could impose $780m in retaliatory tariffs while Mexico could slap $228m as tariff, Agweb.com reported.
The two trading partners for long had argued that the COOL law had led to decline in exports of livestock to US.
US buyers avoided purchasing cattle or hogs from these countries due to tracking costs. If they did agree, then buyers wanted livestock at reduced prices, reported The Wall Street Journal.
The labeling was supported by certain US ranchers and consumer groups. However, the law was opposed by meatpackers as it led to lot ofpaperwork, reported agweb.com.
COOL had become a law in the US in 2009.
A legislation has been passed by the US House to repeal COOL. Now, WTO's ruling should encourage Congress to repeal COOL.
