BUSINESS

WTO Ruling Leads To Canadian Threat Of Trade Sanctions; Food Prices Could Be Impacted

10/21/2014 03:06 EDT | Updated 10/21/2014 03:59 EDT

Controversial U.S. rules that requires meats’ country of origin to be labelled are behind the Canadian government’s threats of a trade war that could result in higher food prices.

Following a World Trade Organization ruling Monday that sided with Canada, Agriculture Minister Gerry Ritz said his government is demanding the complete repeal of U.S laws requiring meats’ country of origin to be labelled.

Ritz told reporters in Saskatoon his government “will impose retaliatory measures” against the U.S. if it doesn’t move quickly to undo the laws.

This is their final strike,” Ritz said, as quoted at iPolitics, referring to the fact the WTO has now ruled three times against the U.S. laws.

The Globe and Mail reports the federal government has already identified 38 U.S. products it could target with tariffs, assuming it gets WTO approval for the move.

Canada would target U.S. beef and pork, ketchup, California wine, Vermont maple syrup, breakfast cereal and Florida orange juice, among other things. Tariffs on these goods would inevitably mean higher prices at the checkout line.

The go-ahead from the WTO for the retaliatory measures could come within a few months, but that could be held up if the U.S. appeals the ruling.

The WTO on Monday ruled, once again, against the U.S. in a dispute with Canada and Mexico over so-called COOL (country of origin labelling) laws.

Canada and Mexico successfully argued at the WTO that the meat labelling rules unfairly discriminated against their food export businesses. Canadian beef exports to the U.S. fell by half after the rules were put into place in 2008.

Under the rules, meat sold in the U.S. carries labels such as “born, raised and slaughtered in the United States,” or alternately “born and raised in Canada, slaughtered in the United States.”

Though the rules are widely supported by consumers’ advocates, they are opposed by many food producers even within the U.S., who say they add considerable costs to food production.

Many beef producers, for instance, mix beef from different sources, making it difficult to track and identify a country of origin.

The U.S. Chamber of Commerce, the National Association of Manufacturers and the National Cattlemen's Beef Association are among the U.S. groups opposed to the meat labelling laws, Reuters reports.

The U.S. lost earlier rulings on labelling laws, and Congress passed new laws to replace them.

While the U.S. has the right to pass country-of-origin laws, it hasn’t done enough to change those elements that discriminated against Canadian and Mexican meat producers, the WTO ruled Monday.

A U.S. official quoted by Reuters said the U.S. would like to see a negotiated settlement, but Ritz said there would be no talks on the matter.

"Basically the [WTO] appellate body has told [the U.S.] three times now to get rid of mandatory country of origin labeling," Ritz said. "I don’t see any negotiation, other than how long it's going to take to make that happen."

Ritz said the U.S. labelling rules effectively cost Canadian meat producers about $1 billion a year.

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