WASHINGTON—Prime Minister Justin Trudeau says he’s prepared to impose retaliatory tariffs on U.S. goods if Congress fails to repeal labelling laws that have complicated Canadian meat exports.
Trudeau said he’s committed to the plan for more than $1 billion in punitive measures established under the previous Conservative government—unless American legislators move.
The years-long dispute is at a critical juncture: it could be resolved within days, or could see Canada and Mexico slap tariffs on a wide range of U.S. goods including meat, wine and frozen orange juice.
“We are putting political pressure,” Trudeau told a news conference Wednesday in Ottawa. “We would rather not have to engage in retaliatory measures—but we certainly will, to stand up for our farmers…
“We’re going to work with Americans&mdashor against them—to make sure that it happens.”
He said he brought up the issue with U.S. President Barack Obama, although the matter rests not with the White House but with legislators who must decide whether to scrap a labelling law at the heart of the dispute.
Trudeau emphasized that he wouldn’t allow one issue to poison the broader Canada-U.S. relationship; he had been critical of the Harper government’s tough posturing in the Keystone XL dispute.
Officials in both countries have actually been working on a special March visit to Washington, where Trudeau would be the first Canadian leader in 19 years feted at a White House state dinner.
As for the meat labels by country of origin, proponents call it a fair way of letting consumers know where their food comes from.
Opponents say it’s irrelevant to food safety—or which there are already inspections. They argue that it’s just disguised protectionism—a system that forces U.S. importers to spend extra money to separate foreign and domestic livestock, drives up the cost of imports and makes them less competitive.
The World Trade Organization sided this week against the U.S., allowing penalties on American products.
Canada is getting support from some powerful American corporate interests. About 250 U.S. companies and trade associations have sent a letter to every member of the U.S. Senate, urging them to heed Canadian and Mexican concerns.
It’s signed by some of the country’s best-known companies, including Coca-Cola, Kraft and General Mills, as well as trade associations representing everything from livestock-producers to vineyards.
“There’s a lot of powerful U.S. paddlers joining Canada in this canoe to get repeal of COOL (country-of-origin labelling),” Gary Doer, Canada’s U.S. ambassador, said of the letter.
The letter-signers want the Senate to adopt a bill passed in the House of Representatives that does away with the requirement that meat sold in the U.S. be labelled by country of origin.
They say one idea being floated in the Senate for a so-called voluntary system is not enough of a change to avert punitive measures.
Because it wouldn’t satisfy the other countries, the letter says, U.S. products would be open to retaliation for potentially 18 months while the issue gets re-fought at the World Trade Organization.
“The voluntary bill currently pending in the Senate suffers from the same problem as the current COOL legislation _ it forces segregation of imported livestock to permit the use of the ‘voluntary’ label,” says the letter, sent late Monday.
“As a result, the U.S. would likely lose yet another COOL case at the WTO. In that case, we would be back to where we are today—except much poorer.”
One of the main proponents of meat-labelling is Michigan Democrat Debbie Stabenow, who chaired the Senate’s agriculture committee when Democrats controlled the chamber and is now the committee’s No. 2 member.
She partnered with a North Dakota Republican, John Hoeven, to author a watered-down version of COOL, but their bill hasn’t advanced either.
“It’s disappointing that this common-sense compromise was blocked in the Senate,” Stabenow said in a statement this week.
“However, I have always said I would not allow retaliation to take effect. It is critical that we work together to find a solution before the end of the year.”