Trade minister Chrystia Freeland says Canada is “just waiting for the number” from WTO for retaliatory tariffs it can impose against U.S. manufactured and agricultural exports in its seven-year dispute over meat-labeling rules. The WTO is expected to release its decision on retaliation today; on May 18, it issued a final ruling that the U.S. labeling plan is an unfair trade barrier. The labels require that packages of beef and pork say where the animals were born, raised and slaughtered.
While Canada and Mexico have asked for WTO permission to impose more than $3 billion in retaliatory duties, their real goal is repeal of the mandatory country-of-origin label (COOL) system. Freeland refused to say on Friday if the government was preparing a retaliatory package, said the Canadian news site iPolitics.
“Freeland said the government is ‘working very hard’ to resolve it (the dispute) themselves in the United States,” said iPolitics, which quoted her as saying, “We are very hopeful that diplomatic channels can be effective and we’re waiting to see how the WTO rules.”
The WTO decision is likely to spark a push in Congress to repeal mandatory labeling, especially if it authorizes billions of dollars in tariffs. The House speedily passed a repeal bill, HR 2393, on a landslide vote, 300-131. The Senate was divided on two approaches. Senate Agriculture chairman Pat Roberts backs a straightforward repeal while Sens. Debbie Stabenow and John Hoeven would replace mandatory labeling with a voluntary system. The Canadian farm bloc says the only acceptable action is full-scale repeal.
Five Democratic senators urged Senate leaders to “resolve this trade dispute with our nearest neighbors before the end of the year.” Canada’s target list ranges from mattresses, office furniture and pipes to wine, meat and grain. “Our nation’s rural communities, farmers, and businesses simply cannot afford to suffer retaliatory tariffs,” the senators said in a letter.
Canada and the United States are each other’s largest trading partners. Beef and pork were the lightning rods for the WTO challenge because of sizable cross-border trade in meat and animals, but COOL also applies to poultry, lamb, goat and venison, seafood, fruits and vegetables, peanuts, pecans, macadamia nuts and ginseng, with little controversy on the other foods. The House repeal legislation would apply to chicken as well as pork and beef.
A fruit of prairie populism, COOL was enacted as part of the 2002 farm law and became mandatory in 2009. Meatpackers and food companies opposed COOL from the start as an expensive, bookkeeping headache and have fought for years to get rid of it. Consumer groups, cow-calf ranchers in the Plains and the National Farmers Union support COOL, arguing that consumers have a right to know where their food is from.
House-Senate negotiators wrote COOL into the 2002 farm law over another goal of populist farm groups, a ban on ownership of cattle and hogs by meatpackers. No processor voluntarily labeled meat in the period before the 2008 farm law made labeling mandatory.