Ottawa threatens tariffs on U.S. wine, juice and ketchup after WTO ruling

Canada is looking at slapping duties on iconic U.S. products ranging from California wine to ketchup after the World Trade Organization found the country’s meat labelling laws offside for a second time in two years.

A WTO appeal panel ruled that a U.S. law that requires grocery stores to list the country of origin on meat products discriminates against Canadian and Mexican livestock. The decision was made public Monday.

The Conservative government warned that it will strike back with punitive duties unless the U.S. ends the “blatantly protectionist” regulations, which it says are costing the North American cattle and hog industry more than $1-billion a year.

“Canada will be watching this situation closely to ensure U.S. compliance in accordance with the WTO’s clear ruling,” Trade Minister Ed Fast and Agriculture Minister Gerry Ritz said in a joint statement. “We will continue to fully assert our rights to achieve a fair resolution to our concern, including seeking authorization to implement retaliatory measures on U.S. agricultural and non-agricultural products if and as necessary.”

While the WTO has acknowledged that the U.S. has a right to impose country-of-origin rules, it has so far objected to the means.

Ottawa has already identified 38 target products for retaliation. The list includes U.S. cattle and hogs, as well as a number symbolic products, including California wine, Vermont maple syrup, Florida orange juice, ketchup and breakfast cereal.

Canada and Mexico won a similar case in 2012. But the U.S. Congress responded with new labelling legislation that farmers and meat packers found even more onerous, prompting the latest appeal.

Canada will be in a position to get WTO approval to strike back as early as two months from now, or roughly the time it would take for the U.S. to complete a final appeal.

Trade experts said they that while Canada would be within its rights to retaliate, a full-blow trade war is unlikely.

“It’s in the interests of both sides to settle this,” argued Toronto trade lawyer Lawrence Herman. “If the U.S. can’t resolve a dispute with Canada it doesn’t look very good for all the other trade deals the U.S. is involved in.”

A spokesman for U.S. Trade Representative Michael Froman said Washington is considering “all options,” including an appeal.

“While the WTO continues to affirm the right of the United States to require country of origin labeling for meat products, we are disappointed that the compliance panels have found that the country of origin labeling requirements for beef and pork continue to discriminate against Canadian and Mexican livestock exports,” spokesman Matthew McAlvanah said.

The case has taken five years to get this far. The U.S. started enforcing its labelling rules in 2008, cutting Canadian meat exports in half, according to the industry.

Source: bnn.ca