Proposed U.S. label changes "cause for concern" for Canada's beef and pork sectors

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Canada’s meat industry is sorting out what the United States Department of Agriculture’s proposed “Product of USA” label changes could mean for marketing cattle and hogs to Canada’s largest trading partner.

While the proposed language change is in reference to a voluntary label, the jury is still out on whether or not the proposal contravenes agreed-upon trade rules around country of origin labeling.

Lauren Martin, senior director, government relations and policy with the Canadian Meat Council, says this isn’t good news for the Canadian industry.

“This is a point of pessimism for us. Obviously, the U.S. is one of our largest trading partners, and anything that impacts our ability to trade across the border is something of grave concern,” Martin says.

Lauren Martin
Lauren Martin (RealAgriculture, 2023)

While it isn’t mandatory Country of Origin Labeling (mCOOL), it’s voluntary, but in some ways the wording is more concerning, she notes.

“There’s some things that both raise and lower the temperature in my mind. The thing that lowers the temperature is that it’s quote-unquote voluntary. Okay, so that’s better than the mandatory COOL that came before. But what is worse is that this proposed rule could be more expansive,” Martin says. “It applies to livestock that is born, raised and slaughtered in the U.S., which is, in fact, wider, broader than the rule in 2015.”

Even if it’s voluntary, if one major retailer takes this on, it impacts the entire value chain, Martin says. (more below)

Dennis Laycraft, executive vice president, has similar perspective, saying, “It is disappointing that by adding ‘and processed’ to ‘born, raised and slaughtered in the United States (U.S.)’, the proposed rule incorporates a potentially more restrictive version of the standard contained in the Mandatory Country of Origin Labeling statute found by the World Trade Organization (WTO) to violate U.S. trade commitments, and to which Canada retains retaliatory rights.

The move is also not necessarily in the best interest of the American beef industry, though it is being driven by public sentiment. The USDA’s Food Safety and Inspection Service “acknowledges that the proposed standard would impose costs on the U.S. meat processing sector, thus making the integrated North American industry less competitive internationally to the detriment of cattle producers in both countries, and Mexico, while providing no quantifiable benefit to U.S. consumers,” adds Laycraft.

So can or will Canada retaliate?

Martin says it’s too early to call. “At this point in time, it’s a proposed rule. So it needs to go through the rule-making process. And certainly what we’d be looking to see signals from the Government of Canada, as to what they wish to do on a WTO formal platform like that, before I would come out and say this is headed towards a WTO retaliation.”

Marie-Claude Bibeau minister of Agriculture and Agri-Food Canada
Marie-Claude Bibeau, minister of Agriculture and Agri-Food Canada (RealAgriculture, 2023)

Early indications from the federal government are equally “wait and see.” On Tuesday, March 7, Ministers Marie-Claude Bibeau and Mary Ng released a joint statement, saying they were concerned about possible disruptions to integrated North American livestock supply chains.

“Canada will closely review the proposed amendments to the labelling of meat, poultry and egg products in the U.S. and will participate in the U.S. rule-making process to ensure that these changes conform to the U.S.’ international trade obligations and do not disrupt supply chains,” the ministers, said in a statement. “Canada will also firmly oppose any proposition from the United States to renew a mandatory country of origin labelling system for pork and beef, a practice which the World Trade Organization allowed Canada to take retaliation measures against the United States.”

Related: U.S. proposes voluntary “Product of USA” label that would shut out Canadian-born cattle and pigs

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