Canada has threatened the U.S. with a retaliatory court action if the latter pushes through with a pending agricultural bill that requires meat sold in U.S. markets to detail its country of origin.
The country-of-origin labelling (COOL) had actually been instituted some six years ago by the U.S. government. However, Canada claimed since it was implemented in 2008, it has cost the country's cattle industry $1 billion per year, devastating its meat exports by half.
As American lawmakers worked to make necessary changes to the COOL, Canada hoped they would erase the labeling requirements. However on Monday, both houses of U.S. Congress didn't seem to have touched on the topic.
Customers shop for meat at Wal-Mart in Rogers, Arkansas, June 4, 2009. REUTERS/Jessica Rinaldi
"By refusing to fix country-of-origin labelling, the U.S. is effectively legislating its own citizens out of work, and harming Canadian and American livestock producers alike by disrupting the highly-integrated North American meat industry supply chain," Gerry Ritz and Ed Fast, Canada's Federal Agriculture Minister and International Trade Minister, respectively, said in a joint statement.
Backers of COOL maintained the labeling is necessary to ensure and maintain food safety and consumer awareness. Critics argued it's protectionism.
The program will "reduce consumer confusion at the point of retail and it provides U.S. ranchers with a label that differentiates their product. These are goals that consumers and ranchers overwhelmingly support," the U.S. Cattlemen's Association said in a Jan 24 statement.
The apparent unfair trade practice has since been elevated before the World Trade Organisation by Canada in August 2013. The country is scheduled to present its arguments on Feb 18 before a compliance panel.
"We will continue to do all we can to stand up for our producers and we encourage the federal government to move forward with retaliation," Lyle Stewart, Saskatchewan agriculture minister, said in a statement on Tuesday.
Messrs Ritz and Fast said the Canadian government will take whatever it takes, "including retaliation, to achieve a fair resolution."
If Canada wins the WTO dispute, it could now legally impose tariffs on U.S. exports of everything from beef and pork products to grains and fresh fruits. The tariffs could be imposed by early 2015.
"The (association) fully supports the government of Canada's efforts to pursue WTO approval to impose retaliatory tariffs," the Canadian Cattlemen's Association said in a statement. The body represents more than 68,000 beef farms and feed lots across the country.
Mr Stewart however hoped this would just be the "last resort" and that an amicable negotiation and agreement could still be reached.