SEVEN long years ago Congress passed a law requiring beef and pork sold in America to be labelled with its country of origin. Canada and Mexico, which export lots of meat to America, denounced the measure as protectionism and complained to the World Trade Organisation (WTO). Last month it ruled in their favour, prompting Canada to ask the WTO’s permission this week to impose retaliatory tariffs of $2.5 billion on American exports. Mexico plans to submit a similar request soon.
The list of imports Canada intends to hit with a tariff of 100% of their value includes live cows and pigs, as well as fresh and frozen beef and pork. But it is not pure tit-for-tat: cherries, mattresses, wooden office furniture, wine and just about anything containing chocolate also face punitive levies. As one unhappy representative of America’s wine industry told a congressional committee, the list was designed to “affect every state in the country, potentially delivering a paralysing blow to US winemakers, other farm and food economies and rural households”.
That is the point. Countries in the situation of Canada and Mexico deliberately select a wide range of targets from a variety of states. That, they believe, will maximise the number of congressmen being importuned by victims to repeal the offending law, says John Weekes, a former Canadian ambassador to the WTO who now...
from The Economist: Finance and economics http://ift.tt/1Txu8yt
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