May 22, 2013

The US will introduce new rules this week that would require meat to be labelled with information about where an animal was born, fed and slaughtered, a move that has drawn fire from Canada and Mexico.

Officials said the rules are aimed at complying with a World Trade Organization (WTO) order, but meat exporters in Canada and Mexico say the new rules would cut even deeper into cattle and hog shipments that have already slumped by as much as half in the last four years.

The Canadian government has threatened a possible retaliatory strike against US imports, and is hoping Mexico will join it.

"What the Americans have proposed as a response to the WTO ruling does not get the job done. It actually makes things worse," Canadian Agriculture Minister Gerry Ritz said.

Penalising US beef and pork is the default option, he said, adding that Canada may ask the WTO to approve moves against other products as well. Such a process could last up to 18 months.

Two-way meat and livestock trade between Canada and the US is worth more than US$5 billion a year. The dispute stems from a 2009 US requirement that retail outlets put the country of origin on labels on meat and other products, an effort to give consumers more information about the safety and origin of their food.

Canada and Mexico complained to the WTO that the so-called country-of-origin labelling (COOL) rules discriminated against imported livestock. The trade body ordered the US to comply with WTO rules by May 23. Instead of relaxing the rules, US regulators proposed tougher requirements, arguing the changes would place the country in compliance with the WTO by applying the same rules to meat produced in the US and other countries.

The USDA is confident that its final changes, to be published by Thursday (May 23), will satisfy the WTO, US Agriculture Secretary Tom Vilsack told Reuters. "I don't think it's our responsibility necessarily to respond to what Mexico or Canada say we need to do," he said. "I think our response is to be consistent with the WTO directive, and as well understand what the WTO said, that while every country has the right to label, the labelling that we had developed was not adequate."

Vilsack declined to say if the US might still adjust its proposal before Thursday's deadline, saying the USDA is still evaluating comments.