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Canadian Importers - Potential Canada-U.S. Trade Retaliation on Horizon 

Canadian Tax Adviser


March 04, 2014


Bob Sacco
Toronto, Trade & Customs


Canada may proceed with a 100% surtax on selected U.S. imports in the first half of 2015. This retaliatory measure is a result of the U.S.'s refusal to change its Country of Origin Labelling (COOL) in the U.S. 2008 Farm Bill, which Canada says discriminates against its livestock and violates WTO obligations. The tax may affect Canadian businesses that import or export products.

In June 2012, the WTO upheld its earlier panel ruling that the U.S. COOL requirements under the 2008 Farm Bill discriminates against Canadian (and Mexican) livestock and violates U.S. WTO obligations. The U.S. had until May, 23, 2013 to comply with the decision.

In May 2013, the U.S. introduced regulatory changes to the existing COOL requirements. According to a Finance Department release, Canada does not agree with the changes and says the changes still do not comply with WTO obligations. Canada intends to pursue a WTO compliance panel.

Canada has the authority to impose retaliatory measures immediately. However, Canada is proceeding with a WTO submission to confirm that the U.S. has not complied with their earlier requirements. A response from the WTO is not expected before the last quarter of 2014, at the earliest.


Products affected by COOL
In the summer 2013, Canada published a list of 38 U.S. imports it is prepared to retaliate against in the first half of 2015, if the U.S. does not change its COOL law. Specific products include:


  • Corn
  • Ethyl alcohol and other spirits, denatured, of any strength
  • Live bovine animals
  • Live swine
  • Bread, pastry, cakes, biscuits, and other bakers' ware.


For more information, contact your KPMG adviser.






Information is current to March 04, 2014. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500


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