Canada will proceed with a plan to take retaliatory measures against U.S. meat-label requirements that the World Trade Organization ruled against on Monday. U.S. lawmakers introduced a bill to repeal the regulations.
With the WTO’s decision this week, Canada can now formally proceed with its case against the U.S. and seek to impose tariffs, Agriculture Minister Gerry Ritz said Tuesday. The WTO said a U.S. ruling on how meat is labeled gives favorable treatment to domestic producers.
The labeling rule has “turned back the clock on our continental agricultural industry,” Ritz said at a news conference in Ottawa, where he was joined by representatives of Canada’s beef and pork industries. “This wrong-headed political initiative continues to do serious harm to our integrated beef and pork industries throughout North America.”
The WTO ruling shows the U.S. has exhausted its appeals, Ritz said, adding proposed Canadian tariffs would total at least C$2.5 billion ($2 billion) a year in “punitive damages.”
Canada will target U.S. exports including beef, pork, wine, cherries, pasta, corn, mattresses and other products, said International Trade Minister Ed Fast, who also appeared with Ritz.
The sanctions could be in place as early as late summer, Ritz said. He said he was “hopeful that just swinging this hammer will be enough to get the administration moving” to repeal the rules.
The WTO appellate report released on Monday in Geneva said the revised rules, which require meat producers to indicate on retail packaging where each animal was born, raised and slaughtered, give less favorable treatment to imported meat than domestic products.
Congress will now consider whether it will further modify or repeal the regulations to avoid retaliatory trade actions from Canada and Mexico, according to the plaintiffs in the case.
U.S. House Agriculture Committee Chairman Michael Conaway, a Texas Republican, introduced legislation Tuesday to get rid of the requirements for pork, beef and chicken. House leaders may schedule a vote in early June to stave off retaliation, he said, a move necessary to keep trade damage from widening into manufacturing and other industries.
Senate Agriculture Chairman Pat Roberts, a Kansas Republican, has said he’s also exploring repeal.
“We lost, we lost, we lost, we lost,” Conaway said at a Capitol Hill news conference. “I am hopeful that a big vote in the House in early June will help the Senate.”
Agriculture Secretary Tom Vilsack said Monday Congress will need to decide the issue, as the administration of President Barack Obama is only enforcing current laws.
Country of origin labeling, which has been hotly contested by U.S. ranchers and meatpackers, became law in 2002, with implementation delayed until 2008. Longtime defenders said U.S. negotiations with Canada and Mexico, who prevailed at the WTO, can still take place before any retaliation.
“The best thing Congress could do is to step aside while the WTO process continues,” said Roger Johnson, president of the National Farmers Union. “Unfortunately, opponents of consumer labeling laws have jumped on the opportunity to repeal COOL, when instead they should be spending their time and energy focusing on giving consumers information they want.”
The U.S. should repeal the country-of-origin labeling requirements to “ensure fairness in international trade,” the Canadian Meat Council said in a statement Tuesday.
“We have clearly won at the World Trade Organization,” Dave Solverson, president of the Canadian Cattlemen’s Association, said in Ottawa Tuesday.
Country-of-origin-labeling requirements have cost Canadian producers C$3 billion annually since the rules were tightened in 2013, he said, adding he hopes the U.S. will repeal the law and prevent any further sanctions. “Retaliation is not what we want,” he said.
Canada is the U.S.’s largest trading partner, with $658 billion in total bilateral goods trade during 2014. Mexico is the U.S.’s third-biggest trading partner, with $534 billion bilateral trade last year.