The Canadian government says it will prepare application for punitive measures.
Canada and Mexico have defeated the United States’ meat-labelling rules at the World Trade Organization, winning a final appeal that could pave the way to retaliatory sanctions.
If the U.S. wants to avoid a broader trade war, Monday’s decision means it might have to drop its insistence on special grocery-store labels that identify meat by its country of origin.
Failure to fix the meat-labelling requirement could lead to tariffs on a wide range of U.S. products, including wine, chocolate, cereal and frozen orange juice.
“Today is an incredibly important and historic day for Canada’s cattle industry,” Dave Solverson, president of the Canadian Cattlemen’s Association, said after Monday’s decision.
The body upheld previous rulings that the U.S. has violated international trade law with a requirement that meat be identified by where it was raised and slaughtered.
Proponents of those labels argued that customers have the right to know where their food comes from. Canada and Mexico countered, however, that it was actually a protectionist measure designed to keep foreign meat off the grocery shelves while offering no benefit for food safety.
Livestock producers also said the requirement created costly overhead, and logistical problems for an integrated industry where animals might cross the border multiple times.
The measure was blamed for a drastic decline in meat exports to the U.S. in recent years, and the other North American countries repeatedly threatened to retaliate if successful at the WTO.
That moment has arrived.
The U.S. is now left with two options according to the Canadian and Mexican governments: Fix the law, or suffer punitive tariffs on a range of goods.
The Canadian government said it will now prepare an application to the WTO for punitive measures. The process involves setting a dollar value on the retaliation, and identifying targeted goods for tariffs…