The U.S.’s policy to label the origins of packaged meats, such as where the animals were born, raised, and slaughtered, has reportedly incited tariffs from both Canada and Mexico that together go up to a billion dollars.
According to Arkansas Online, the two countries state that the meat labeling rules discriminates against Mexican and Canadian livestock. In retaliation, the World Trade Organization (WTO) ruled that Canada can impose $780 million in retaliatory tariffs, while Mexico can impose $228 million.
"We are disappointed with this decision and its potential impact on trade among vital North American partners," Tim Reif, General Counsel for the Office of the U.S. Trade Representative, said, according to the report.
This news comes after WTO previously found that the “country-of-origin” labeling law puts Canadian and Mexican livestock at a disadvantage “repeatedly” since 2011, putting the decision in the hands of Congress to consider as far as repealing the law in a year-end spending bill.
The label is currently supported by some U.S. consumer groups and ranchers who are opposed by meatpackers saying they require “costly paperwork.”
Tyson Foods Inc. has reportedly halted any purchase of Canadian cattle in 2013 because of higher costs associated with the labeling law.
"We believe this labeling law must be repealed before Mexico and Canada, two of our top trading partners, retaliate with damaging tariffs," a Tyson spokesman said in email on Monday, according to Arkansas Online. "This law has increased the U.S. meat industry's operating costs, unnecessarily hurting livestock producers without providing any additional value to our customers and consumers."
The Canadian government stated in a release, as well, that it will “take steps to retaliate” if the U.S. Senate doesn’t take immediate action to repeal the labeling law.
"Canada continues to work with our partners in the United States, and in the U.S. Senate, to urge the full repeal of the ... policy for beef and pork," the release stated, administered by International Trade Minister Chrystia Freeland and Agriculture and Agri-Food Minister Lawrence MacAulay.
On the United States side of supporters for the revision of the label, U.S. Senator for R. Arkansas Tom Cotton commented that this would be “a devastating blow to both our national and state economies," adding that the economic impact on Arkansas alone would be tens of millions of dollars.
Still, the WTO did not give the two countries the full sum of tariffs that each were seeking, the report stated, ruling that their export losses to date were less than claimed.
DeliMarket News will continue to follow these events and their impact on the industry as they develop.
