U.S. lawmakers mount effort to avert trade war with Canada, Mexico

WASHINGTON – A group of American lawmakers want to prevent a dispute over meat labels from escalating into a continental trade war where tariffs pummel U.S. wine, chocolate, cereal, jewelry and frozen orange juice.

They expressed hope of repealing a law that’s caused the trade tension in North America and drawn threats from the continent’s two smaller amigos to gang up on the third.

Several dozen lawmakers co-sponsored a bill Tuesday that would rescind an American meat-labelling standard that has prompted tariff talk from Canada and Mexico.

The bill was introduced just one day after the World Trade Organization sided against the U.S. labelling rule, which it said violated international trade law.

The meat standard was always opposed by a sizeable bloc within the U.S. Congress, as well as some business groups. They now point to the imminent threat of penalties and are pushing for a quick repeal.

The bill would drop the requirement that beef, pork and poultry sold in U.S. grocery stores be labelled by the country where the animals are born, raised and slaughtered. They hope to get it passed before the U.S.’s neighbours proceed with tariffs of up to 100 per cent on a wide range of American goods.

The Republican lawmaker who introduced the bill expressed optimism that it had enough support to pass the House of Representatives by early June, then move on to the Senate — where it could face a more difficult test.

“This train is leaving — if not left — the station,” said Michael Conaway, the chair of the House agriculture committee, which will begin studying the bill this week.

Critics call the labelling rule a protectionist measure, designed to drive down meat imports from foreign suppliers. They argue that it complicates the sorting process for companies with foreign partners, given that livestock sometimes crosses the border more than once before winding up at the grocery store.

But the label defenders say consumers deserve to know where their food comes from and they shouldn’t have their democratic laws overruled by an international trade body.

At a news conference, Conaway replied that the U.S. was a member of the WTO when it introduced the labelling rules over the last decade and broke the agreements it signed.

The Canadian government said Tuesday that it’s serious about retaliation.

It expects to be in a position to impose tariffs by the fall, after applying for permission from the WTO. Agriculture Minister Gerry Ritz said the penalties would amount to billions a year.

“Our government has been clear that Canada will never be the first to blink,” Ritz said in Ottawa.

The list of potential tariff targets was selected to impose maximum damage on those U.S. states whose lawmakers have most supported the labelling laws.

The Canadian government estimates that it would hit industries that export $835 million of goods a year from California to Canada, $684 million from Michigan, $511 million from Illinois, $440 million from New York, $326 million from Ohio and $305 million from Pennsylvania.

The California wine lobby was among the industry groups that appeared at a Washington news conference in support of repeal of the meat-label law.

“We now have the largest market share in Canada,” said Wine Institute president Robert Koch, who said sales to Canada had increased 78 per cent in the last five years, outpacing other wine exporters.

“It has taken decades for us to build this market in Canada. And it would be irreparably harmed in an instant, if Congress does not act.”

The repeal bill faces a more difficult test in the Senate, for two reasons.

First, the U.S. upper chamber requires a 60-per-cent supermajority vote to pass most types of bills. In addition, congressional Democrats there have blocked attempts to review meat labels in the past.

The Obama administration isn’t telling lawmakers exactly how to proceed. But it’s saying they need to repeal or modify the law.