Canada warns of trade retaliation after COOL rules stick in U.S.

The Canadian government is fuming over an agriculture bill in the United States and is warning of trade retaliation in the latest twist in a lengthy dispute that just days ago showed signs of resolution.

American lawmakers have failed to make changes to country-of-origin labelling (COOL) rules that had devastated Canadian meat exports, which have dropped by half to the U.S. since 2008.

The Canadian government is fighting the measures on separate fronts and had been hopeful that a sweeping new U.S. farm bill might become the vehicle to do away with the labelling requirements.

Those hopes dimmed drastically this week as lawmakers from both parties, in both houses of Congress, emerged to say that they’d arrived at a deal for a 950-page bill that didn’t touch the labelling requirements.

That legislation will still face some resistance as it makes its way through congressional votes to President Barack Obama’s desk.

However, the news was undeniably a blow to Canadian efforts.

The federal government, which has previously threatened retaliation over the issue, once again raised the spectre of a trade war.

“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,” Federal Agriculture Minister Gerry Ritz and International Trade Minister Ed Fast said in a joint statement...

The battle over meat labelling has pitted Canadian farmers and their meat-processing partners in the U.S. against American farmers who pushed for those rules on foreign imports...

Ritz has said Ottawa will continue fighting the regulation at the World Trade Organization (WTO), and cattlemen on both sides of the border will go on with their own court action...

U.S. meat-packing companies are already vowing a fight.

And other pockets of resistance are forming against the legislation, whose contents were described by lawmakers but not actually publicly released...

But .. if that doesn’t work, Canada would be looking to impose retaliatory tariffs on U.S. exports in the first half of 2015 on things such as beef, pork, cereals, cakes, cookies and fruit.

“The products that are on that list were selected because they’re produced in areas that are represented by congressmen and senators who oppose that resolution in the farm bill,” Masswohl said.

In year-end interviews, Ritz had said Canada’s pledge to retaliate against a wide range of U.S. products if COOL wasn’t scrapped or amended—from orange juice to bread—was no idle threat.

“This is not a game of chicken here. This is a game of reality,” Ritz told The Canadian Press. “They are hurting our industry to the tune of $1-billion per year.”...

This has been excerpted from the 28 January 2014 article by the Canadian Press and is available in its entirety at http://www.canadianmanufacturing.com/general/canada-warns-of-trade-retaliation-after-cool-rules-stick-in-u-s-131050.