The Canadian Press - ONLINE EDITION

Canada threatens 'retaliatory measures' over new US meat labeling regulations

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TORONTO - Canada said Thursday that it is considering retaliatory measures against the United States in a dispute over meat-labeling rules that Ottawa and the World Trade Organization consider discriminatory.

The Canadian government said that new U.S. country of origin labeling regulations announced Thursday that require tracking beef, chicken and hogs from livestock through the meat processing and distribution systems are unduly burdensome.

Agriculture Minister Gerry Ritz and Trade Minister Ed Fast said in a joint statement that rule means additional costs for producers on both sides of the border and increased damage to the industry.

"Canada will consider all options at its disposal, including, if necessary, the use of retaliatory measures," the statement said.

In 2009, the U.S. issued a requirement that retail outlets put country of origin labels on meat and other products in an effort to give U.S. consumers more information about their food.

The rule led to lower U.S. imports of livestock from Canada cutting Canadian cattle shipments to the U.S. by 50 per cent within a year and cut the export of slaughter hogs by 58 per cent, according to the Agriculture and Agri-Food Canada department.

The Canadian Pork Council estimates the labeling rule has already cost Canada about US$970 million (CA$1 billion) annually in beef and pork exports.

The WTO said last year that the 2009 U.S country of origin rule discriminated against livestock from Canada and Mexico. Washington had until Thursday to ensure the labeling rule complied with trade obligations.

The Canadians said the U.S. regulations will not bring the Americans into compliance with last year's ruling by the World Trade Organization.

Tom Vilsack, U.S. agriculture secretary, said the new rules are aimed at resolving the tense trade dispute between Canada, the U.S. and Mexico.

"USDA remains confident that these changes will improve the overall operation of the program and also bring the mandatory (country of original legislation) requirements into compliance with U.S. international trade obligations," he said in a statement.

The new labels will include such information as "born, raised and slaughtered in the United States" for American meat. Cuts of meat from other countries could carry labels such as "born in Canada, raised and slaughtered in the United States."

The USDA says its country-of-origin labeling system was designed to help consumers make informed decisions about food choices.

Note to readers: This is a corrected story. An earlier version had an incorrect U.S. currency figure for estimated cost of the labelling rule.

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